# Implications of ING Direct being bought



## J Watts (Jul 19, 2012)

http://business.financialpost.com/2...l-bank-scoping-out-ing-direct-canada-analyst/

http://business.financialpost.com/2012/08/02/ing-considers-sale-of-canadian-online-banks/

Anyone currently invested in ING Direct, whether directly or with them as a bank, holding mutual funds, etc.?

Does anyone have any predictions on the implications if ING Direct is bought by another bank?


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## kcowan (Jul 1, 2010)

The bank would likely keep it intact as a discount outlet like PC Financial. If not, what is their value?


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## Ihatetaxes (May 5, 2010)

I am kind of done with ING despite being a loyal customer for years. As for my personal accounts I still have some money in my kids account as it pays 2% but when that deal ends I am out of there for good. I have a ton of cash in our ING business account earning a TERRIBLE 1% but I just can't find a better business HISA deal and RBC just doesn't care about us moving it over to them and don't have any good business savings rates.


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## Causalien (Apr 4, 2009)

Ihatetaxes said:


> I am kind of done with ING despite being a loyal customer for years. As for my personal accounts I still have some money in my kids account as it pays 2% but when that deal ends I am out of there for good. I have a ton of cash in our ING business account earning a TERRIBLE 1% but I just can't find a better business HISA deal and RBC just doesn't care about us moving it over to them and don't have any good business savings rates.


Heh, another one being bought by Scotia. I spent the last few years diversifying into different entities, only to see all of them being bought by either Scotia and TD.
What happens next is usually: deterioration of services, longer response time, ninja introduction of fees and more spam.


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## brad (May 22, 2009)

Is it clear that Scotia will be the buyer? I think National Bank is considered one of the interested parties.

Interestingly in the United States ING was bought by Capital One, a widely reviled company. Hundreds (possibly thousands) of ING customers closed their accounts on the news, assuming that Capital One would impose fees and reduce services. A year later nothing has changed: it's still fee-free, and friends of mine with ING accounts in the States say they haven't seen any difference at all. Changes may eventually come down the road, but it's clear that "no fees" is the main reason why people keep money at ING; any new owner that changes that model is guaranteed to lose virtually all its customers, and they know it.


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## Four Pillars (Apr 5, 2009)

A bank that buys a no-fee institution probably won't start charging fees.

If ING Canada is profitable now (or very close to it), the new owner can increase the profit by amalgamating a lot of the back office infrastructure and even people (ie computer systems, call centres maybe). 

The ING dividision might never be as profitable as their regular high-fee business, but the bank will (hopefully) still make enough profit to make it all worthwhile.


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## OhGreatGuru (May 24, 2009)

It's a shame, but seems to be the way of things. Companies arise and challenge the big banks' ways of doing business with more consumer-friendly options, only to go under some years later and be swallowed up by the big banks. (See Trust company history for example). In the meantime the banks have had to improve their own services, though never as good as the upstarts.

I seem to recall seeing speculation a few years ago when the Dutch parent company needed bailing out that ING Canada might be sold to pay its debts. So it's no great surprise.

Certainly I would rather see it taken over by Scotia than one of the Big Three. And if it is kept as a separate operation it may still keep pressure on the banks to offer lower-fee funds and services. Alternatively their Street-Wise funds might transmogrify into something like TD's e-funds, keeping costs down by being available only through on-line banking.


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## brad (May 22, 2009)

OhGreatGuru said:


> Companies arise and challenge the big banks' ways of doing business with more consumer-friendly options, only to go under some years later and be swallowed up by the big banks.


ING is definitely not "going under," though, their business in Canada is solid and this is, as you recalled, related to the European bailout.


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## Ihatetaxes (May 5, 2010)

My Account Manager at RBC for our business account just offered me these options for our extra cash vs. the 1% ING is paying us...

1) 90-day Non-Redeemable GIC at 1.25%
2) 180-day Non-Redeemable GIC at 1.40%
3) One Year Cashable GIC at 1.20%

Not much better but I think I will move it over and do a combo of all three. Still a chance we may need the money in 6-10 months so I don't want to lock in any longer.


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## 44545 (Feb 14, 2012)

Ihatetaxes said:


> My Account Manager at RBC for our business account just offered me these options for our extra cash vs. the 1% ING is paying us...
> 
> 1) 90-day Non-Redeemable GIC at 1.25%
> 2) 180-day Non-Redeemable GIC at 1.40%
> ...


Why choose any of those? Other institutions pay around 2% interest on savings accounts or 3% on TFSA cash accounts, CDIC insured.
(Canadian Direct Financial and People's Trust come to mind)


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## OhGreatGuru (May 24, 2009)

brad said:


> ING is definitely not "going under," though, their business in Canada is solid and this is, as you recalled, related to the European bailout.


I stand corrected. "Going under" was a poor choice of words. They get bought out by the oligopoly.


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## mario 1 (Nov 6, 2009)

Those aren't very good options, why tie up your money for a year at 1.20%. You can get close to 2%
with a regular savings account with Ally or the like.
Ing is more than just savings. It's free chequeing free debit , and the 1.35% still beats your bank.


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## Ihatetaxes (May 5, 2010)

CJOttawa said:


> Why choose any of those? Other institutions pay around 2% interest on savings accounts or 3% on TFSA cash accounts, CDIC insured.
> (Canadian Direct Financial and People's Trust come to mind)


Most institutions don't have business accounts and if they do the rates are always lower. This money can't just be transferred to my personal account from the corporation.

Edit - just checked again and neither Ally, CDF or PT have business accounts available. ING does but only at 1% which is where the money sits collecting dust.


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## brad (May 22, 2009)

mario 1 said:


> Ing is more than just savings. It's free chequeing free debit , and the 1.35% still beats your bank.


We discussed this point in a related thread (in the Frugality section) a while back -- this in fact is what makes it worth having accounts at ING because it's an integrated solution and the free chequing is a big selling point. If you're paying $200/year in bank fees for your accounts (or if you have to keep $5,000 tied up in order to avoid monthly fees) and have a HISA at another institution earning 2%, are you really earning 2%? Not if you look at your finances at a whole. I would deduct bank fees from your interest rate the same way you would deduct the MERs from the annual yield of investments in ETFs or other funds to see what your actual rate ends up being.


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## fatcat (Nov 11, 2009)

i have been at ally for a few years and could not be happier
i get 1.8% and transfers move into my main bank at light-speed
online service is fast and helpful
this is the future and i'm sure all of the big banks want to have an online subsidiary
many of the high-paying manitoba credit unions are subsidiaries of their older more established "physical" banks


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## andrewf (Mar 1, 2010)

To me, PC Financial has a better free chequing offer, and similar rates to ING. Their debit machine network is more extensive. PC Financial has physical kiosks that can provide some services. I see no compelling reason to use ING.


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## Echo (Apr 1, 2011)

@andrewf I have the ING Thrive chequing account. Since I rarely take out cash, the limited bank machine network is not a big deal. I do send quite a few email money transfers, which ING provides for free, while PC charges $1.50 just like the big banks.


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## Spudd (Oct 11, 2011)

When you do an email transfer with ING, is it instant like it is with the big banks? The reason I ask is, that would be a faster way to get the money from ING to your normal bank if you have accounts at both.


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## brad (May 22, 2009)

andrewf said:


> To me, PC Financial has a better free chequing offer, and similar rates to ING. Their debit machine network is more extensive. PC Financial has physical kiosks that can provide some services. I see no compelling reason to use ING.


True, but PC Financial is not available in Québec (there are workarounds, but it's not easy to set up an account unless you live near the border with another province). ING has physical kiosks as well, although they don't carry cash.


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## andrewf (Mar 1, 2010)

Echo said:


> @andrewf I have the ING Thrive chequing account. Since I rarely take out cash, the limited bank machine network is not a big deal. I do send quite a few email money transfers, which ING provides for free, while PC charges $1.50 just like the big banks.


ING charges for cheques. I suppose I might use email money transfer if it were free, but I'm happy enough with cheques. Everyone will take a cheque, but some people would give you a funny look when you offer an EMT.


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## Echo (Apr 1, 2011)

@andrewf - Your first 50 cheques are free with ING. If you need more cheques later on, you can order them online for $12.50 a booklet. With the amount of cheques I write, 50 should last me a lifetime.

@Spudd - You can do an Interac e-Transfer just like with the big banks, for a fee ($1). There's also an option to use a regular email money transfer, which takes 1-2 business days, but it's free. That's what I use. Here's the difference:

Interac e-Transfer is a service provided by Interac. They charge for the service. The banks using the service have the ability to transfer money via EMT instantly between each other without any holds.
They are able to transfer instantly because Interac takes responsibility for the money so that other banks do not have to worry if funds go NSF.

A regular Email Money Transfer (EMT) does not transfer funds instantly, because it uses the regular Electronic Funds Transfer (EFT) procedure. Funds arrive in the recipient's account 1-2 business days after the Email Money Transfer is accepted - just like an Electronic Funds Transfer (EFT).

I have an external linked account set up with TD, which I can transfer funds to and from with no fees. This takes 1-2 business days. Be careful transferring from your external account to ING though, because they'll hold some of the funds for 5 business days. I got caught with that once - http://www.moneyville.ca/blog/post/1241088--it-s-important-to-know-your-bank-s-hold-policy


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## webber22 (Mar 6, 2011)

It was just announced that Scotiabank has bought ING for 3.1B (1.9B after deducting excess capital). This could temporarily punish the BNS stock

UPDATE: Just saw a new issue at the broker at $52 for $1.5B. Wow this is going to push the stock down from today's close of $53.60. Long term this is a positive though


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## JustAGuy (Feb 5, 2012)

fatcat said:


> i get 1.8% and transfers move into my main bank at light-speed


Define light speed? It takes the better part of a week for me.


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## Belguy (May 24, 2010)

Welcome all you ING account holders to Scotiabank!!


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## Jungle (Feb 17, 2010)

Thanks, I expect all extra earnings to be returned to shareholders through increased dividends.


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## brad (May 22, 2009)

Belguy said:


> Welcome all you ING account holders to Scotiabank!!


It'll still be called ING for the next year or so, after which the name will change. All staff are being transferred and it'll operate as a wholly owned subsidiary.

Some angry ING account holders are jumping the gun and already closing their accounts on the news, which seems awfully premature to me; I'll wait and see what happens. If they impose fees I would leave, but I think that's true for just about everyone else with ING accounts too and I'm sure Scotiabank realizes it.


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## humble_pie (Jun 7, 2009)

the question for me is does this push the parent dutch bank closer to resuming dividends on its common stock.

ING trades as an adr in ny. In 2008 when the financial crisis caused ING to borrow 10 million euro from the dutch government, dividends were suspended; they were to be resumed when the debt would be repaid. An instalment of that debt has already been paid. It looks as if the final instalment is looming.

ING adr was historically a $25-30 stock with decent dividends & decent US options. It's currently south of $8, no dividends but still with decent options. Dividend resumption might be expected to jolt the stock north.


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## Spudd (Oct 11, 2011)

I had already been kind of disgruntled with ING. I feel they lowered their rates too much. I might just move everything over to TD if they lower the rates any further.


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## J Watts (Jul 19, 2012)

And there it is: http://www.cbc.ca/news/business/story/2012/08/29/scotiabank-ing-bank.html


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## mario 1 (Nov 6, 2009)

Hope this means use of Scotia bank machines for ING, got one just outside my door.


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## fatcat (Nov 11, 2009)

i hope ally isn't the next to go ...


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## Square Root (Jan 30, 2010)

I guess that funny little Dutch guy won't be saying "save your money" anymore. It will be intresting how BNS walls the ING business to prevent all their current customets from migrating to the ING channel.


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## OhGreatGuru (May 24, 2009)

ScotiaBank had a full page ad in today's paper saying that they bought ING for its "innovative products, great value, and exceptional service", and they (Scotia) would be "foolish to change what makes ING great for you". Basically they are saying customers wont see any (immediate) changes in ING's business model


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## avrex (Nov 14, 2010)

I remember when ScotiaBank purchased E*Trade Canada (2008).
Within a few months, the interest earned on the cash sitting 'Cash Optimizer' account, went from something like 3.5% to 1.0%. Today it sits at 0.65% in the iTrade account.

Things could change at ING.


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## jcgd (Oct 30, 2011)

Apparently it'll be business as usual, or so they say.
http://www.scotiabank.com/ca/en/0,,5504,00.html

I had a listen to this pod cast with Rob Pitfield, Group Head & Chief Risk Officer at BNS and he said they don't plan on changing much if anything with ING.
http://cc.talkpoint.com/barc002/091012a_lp/?entity=35_P5QJ8FH


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## Cal (Jun 17, 2009)

ING to come out with Visa cards....

http://www.theglobeandmail.com/glob...t-for-ing-canada-credit-cards/article4557689/


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