TORONTO, ONTARIO--(Marketwire -08/29/12)- NOT FOR RELEASE OR DISSEMINATION IN THE UNITED STATES
Scotiabank announced today that it has reached a definitive agreement to purchase ING Bank of Canada (ING DIRECT) from Netherlands-based parent ING Group for $3.126 billion in cash, which is expected to result in a net investment by Scotiabank of approximately $1.9 billion after deducting the excess capital currently at ING DIRECT. This acquisition is subject to regulatory approvals. The Bank is also announcing a public offering of 29 million common shares at $52.00 on a bought deal basis for gross proceeds of $1,508,000,000 to fund the acquisition.
"ING DIRECT has had proven success in meeting the needs of those Canadians who are not looking for the added services, advice and relationships provided by traditional banking channels. We recognize that success and are committed to keeping this unique platform," said Rick Waugh, President and CEO of Scotiabank. "ING DIRECT will benefit from the backing of a strong, stable Canadian shareholder with the additional resources to enable it to expand and grow. This in turn will provide our shareholders with a new source of incremental earnings beginning in year one, and a new deposit base to further diversify our funding."
With approximately $40 billion in assets, $30 billion in deposits, 1.8 million customers, and over 1,100 employees, ING DIRECT is the 8th largest bank in Canada. It is a direct bank that serves customers online, via contact centres and mobile devices, offering savings, chequing, mortgages and four mutual funds. It has five ING DIRECT Cafes and no physical branches. ING DIRECT has a strong mortgage portfolio with 59% of mortgages insured and an average loan-to-value ratio on uninsured mortgages of 53%. Credit quality is high with provisions for credit losses below 0.02%.
"Scotiabank is committed to preserving what ING DIRECT's customers have come to love about it," said Anatol von Hahn, Group Head of Canadian Banking at Scotiabank. "ING DIRECT will continue to operate separately and customers will be able to interact the way they do now using their existing account numbers and passwords, served by the same familiar team."
"Scotiabank is a strong, Canadian-based and diverse multinational bank that values the impact ING DIRECT has had on the lives of Canadians over the past 15 years," said Peter Aceto, President and CEO of ING DIRECT. "With their backing and commitment to maintaining what has made ING DIRECT special, I have great optimism for the future for our fantastic employees and our loyal customers."
Additional details of the acquisition:
Subject to regulatory approvals and closing conditions, this transaction is expected to close by December 2012.
The ING DIRECT branding will be maintained under licence and any future branding will reflect the type of experience that customers receive now.
On closing of the transaction, Scotiabank will also fund the redemption of $320.5 million of subordinated debt issued by ING DIRECT.
Given our third quarter capital position, our internal capital generation and today's equity offering, Scotiabank expects to remain well within our targeted range for our Basel III common equity tier 1 ratio of 7 to 7.5% through Q1 2013.
Additional details on the financing:
Scotiabank has agreed to sell the common shares to a syndicate of underwriters led by Scotia Capital Inc. on a bought deal basis. Scotiabank has granted to the underwriters an option to purchase up to an additional 4.35 million common shares, which option is exercisable, in whole or in part, by the underwriters any time up to 5:00 p.m. (Toronto time) on a date that is 30 days after the closing date. The maximum gross proceeds raised under the offering will be $1,734,200,000 should this option be exercised in full.
Closing of the financing is expected to occur on or after September 7, 2012. The net proceeds will be used by Scotiabank to fund the acquisition of ING DIRECT.
The common shares will be issued in Canada by way of a prospectus supplement that will be filed with the securities regulatory authorities in Canada under Scotiabank's June 8, 2012 base shelf prospectus.
The common shares to be offered have not been and will not be registered under the United States Securities Act of 1933, as amended, or under any state securities laws, and may not be offered, sold, directly or indirectly, or delivered within the United States of America and its territories and possessions or to, or for the account or benefit of, United States persons except in certain transactions exempt from the registration requirements of such Act. This release does not constitute an offer to sell or a solicitation to buy such securities in the United States or in any other jurisdiction where such offer is unlawful.
Analyst conference call:
-- A conference call to discuss the transaction will take place on August 29, 2012 at 4:30 EDT and is expected to last approximately 30 minutes. Interested parties are invited to access the call live: -- Via telephone, in listen-only mode, by calling 416-644-3415 or 1-877- 974-0445 (North America toll free). Please call five to 15 minutes in advance. -- Slides will be available on the Investor Relations Page of www.scotiabank.com -- Following a discussion of the acquisition by Scotiabank and ING DIRECT Executives, there will be a question and answer session.
Conference call archive:
-- A telephone replay of the call will be available between August 30, 2012 and September 13, 2012 by calling 416-640-1917 or 1-877-289-8525 (North America toll free). The access code is 4562480#
Scotiabank is one of North America's premier financial institutions and Canada's most international bank. With more than 81,000 employees, Scotiabank and its affiliates serve some 19 million customers in more than 55 countries around the world. Scotiabank offers a broad range of products and services including personal, commercial, corporate and investment banking. With assets of $670 billion (as at July 31, 2012), Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS). For more information please visit www.scotiabank.com.
Caution regarding forward looking information:
Our public communications often include oral or written forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the United States Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements may include comments with respect to the Bank's proposed acquisition of ING DIRECT, the Bank's funding plans and the impact of the acquisition on the Bank's earnings and capital ratios. Such statements are typically identified by words or phrases such as "believe", "expect", "anticipate", "intent", "estimate", "plan", "may increase", "may fluctuate", and similar expressions of future or conditional verbs, such as "will", "should", "would" and "could".
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