ING transaction account on the starting blocks

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ING banks on solid fee cuts to build on its virtual successes

Eric Johnston The Age August 4, 2009

ING, despite a bruising at the hands of the financial crisis, is preparing to broaden its Australian banking business. The Dutch-based lender is looking to capture a slice of day-to-day transaction accounts.

ING is better known for online savings and lending, and the move into transactions will pit it directly against the nation’s big four banks.

But ING Direct’s new Australia chief executive, Don Koch, said transactions such as Eftpos and ATMs were the key to keeping customers.

‘‘We may appear virtual, but we’ll be physical with this,’’ said Mr Koch, who took charge of ING’s Australian operation in June.

With its eye on bank fees, ING is planning to take the big four lenders’ offer to cut penalty fees a step further.

It will scrap monthly account fees, ATM charges and most overseas transaction fees, putting pressure on its rivals to follow suit.

The move in Australia follows a tumultuous year for ING’s Dutch-based parent, which was hit hard by the credit crisis. It slipped into a loss last year after heavy write-downs, and the Dutch Government had to inject €10 billion ($A17 billion) into the company.

ING also suffered locally, as one of several lenders whose deposits fell as customers started worrying about the health of the broader banking system.

The latest Australian Prudential Regulation Authority figures show ING’s household deposits of $16.3 billion are now largely in line with the October figure. This compares with low single-digit deposit growth of the main banks.

Mr Koch said the outflows had since been recovered and deposit growth had increased in recent months.

In Australia, ING has about 1.2 million customers with savings accounts, compared with Bendigo and Adelaide Bank’s 1.3 million. ING also has about 350,000 mortgage customers.

ING is considering offloading assets including its private banking business in Europe and Asia.

ANZ has been rumoured to be among possible buyers for the Asian business.

Mr Koch, who was a key player behind ING’s push into online savings accounts in Australia nearly a decade ago, said there was a strong commitment to the Australian business.

ING last month raised $3.5 billion in long-term debt — backed by the Government guarantee — which Mr Koch says positions the bank for the future.

‘‘To be brutal, I wouldn’t be here if there was any other option. I have a long-term view on what I’d like to achieve here,’’ he said.

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