Business World

Dutch financial group ING said on Monday it will sell its Taiwan life insurance unit to Fubon Financial for $600 million, a day after securing a 10 billion euro ($13.5 billion) government cash injection.

As policy makers around the world pour in billions of dollars of state cash to help stabilize their banks, financial institutions such as ING and U.S. insurance giant AIG have been selling off non-core overseas assets to help shore up their capital positions.

“ING is affected by the global financial crisis, and they need to adjust their asset allocation as a group,” Fubon President Victor Kung told reporters. “That is why we got this chance… We are sure we’ve bought a good company at a very reasonable price.”

The Dutch financial giant announced the deal after it became the latest European bank to seek government funding by agreeing to a government cash injection on Sunday.

Following a weekend of intense talks after its share price was slashed by more than a quarter in the latest trading session and the partial nationalization of rival Forbis two weeks ago, ING was seeking to shore up its financial position pay day advance.

“The market environment has changed over the last two weeks and the expectations for capital levels have changed following massive capital injections in financial institutions worldwide,” ING Chief Executive Michel Tilmant said on Sunday.

“We have accepted the consequences of this situation and welcome the support of the Dutch state,” he told an evening news conference, flanked by Dutch Finance Minister Wouter Bos and central bank president Nout Wellink.

ING will issue 10 billion euros worth of securities to the Dutch state, which will have a position similar to common shareholders. The transaction is designed not to dilute shareholder capital. 

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