ING Group is planning to slash up to 7,000 jobs in the Netherlands and Belgium over the next 5 years while accelerating investment in its digital platforms to achieve annual savings of €900 million ($1 billion) by 2021, according to the Dutch lender today.
The move accounts for just under 12 percent of the bank’s 52,000 workforce and includes around 2,300 cuts in the Netherlands and about 3,500 in Belgium through 2021. The company expects up to 7,000 workers will be affected.
While other large banks have announced huge layoffs in a quest for increased profitability, most recently Commerzbank, which announced last week that it was cutting 10,000 jobs amid dwindling profit margins, ING said the job cuts are partly to combine technology platforms and risk control centres and to help it to contend with regulatory burdens and low interest rates.
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Chief Executive Officer, Ralph Hamers is investing in financial technology to reduce personnel and branch costs and seeking to expand lending to consumers and companies outside its home market of the Netherlands.
The lender has had success, especially in Germany, with a business model focused on maintaining little physical presence and conducting its retail business entirely online, winning customers from Deutsche Bank.
Low Interest Rates and Regulatory Demands
However, while ING has emerged from a restructuring and government bailout with stronger capital buffers than some of its competitors, record-low interest rates and regulatory demands are putting pressure on the Amsterdam-based lender to cut costs.
ING will invest 800 million euros in its technology platform, which will be rolled out over the next five years across Spain, Italy, France, Austria and the Czech Republic.