(Updates with comment from analyst in fourth paragraph.)
Feb. 22 (Bloomberg) -- ING Groep NV, the biggest Dutch financial-services company, promoted Ralph Hamers to chief executive officer, replacing Jan Hommen, the former chairman who led the firm through the aftermath of a government bailout.
The Dutch national, 46, has led the company’s Belgian and Luxembourg banking unit since 2011 and will take the top job in October. Hommen, whose four-year term as CEO ends on May 13, will have his contract extended by four months to “ensure a smooth leadership transition,” the Amsterdam-based company said in a statement today.
Hamers will become responsible for completing a European Union-imposed restructuring plan that will see ING sell its global insurance and investment-management operations before the end of 2018 and repay the remainder of the Dutch government’s 10 billion euros ($13.2 billion) in bailout money by May 2015. He’ll also have to show investors what is next.
“His job will be to map out a strategy for what ING Bank will be following the restructuring,” said Jan Willem Weidema, an Amsterdam-based analyst at ABN Amro Bank NV, who has a buy rating on shares. “He’ll have to build a very clear profile for the European retail bank ING’s going to be.”
Hamers joined the company in 1991 and has run ING’s Dutch banking unit and its global commercial lending division.
ING shares rose 2.3 percent to 6.32 euros at 3:29 p.m. in Amsterdam, giving the company a market value of 24 billion euros. That’s a gain of more than 50 percent since Jan. 23, 2009, the last trading day before Hommen took the top job.
“Hamers, while a surprising candidate, seems well suited for the job,” said Matthias De Wit, a Brussels-based analyst at Petercam SA with a hold rating on the shares. “He’s proven to be a capable and experienced manager and has a lot of experience in risk management.”
Hommen, 69, became CEO after chairing ING’s supervisory board. He took over from Michel Tilmant after the company’s 2008 bailout and has disposed of assets from Latin America to Asia, including the sale of ING Direct USA to Capital One Financial Corp.
He has repaid the Netherlands 7.8 billion euros of the bailout so far, as well as 2.4 billion euros in interest and premiums. Hommen has announced at least 15,000 job cuts since January 2009. More than 25 divestments with 20 billion euros in proceeds reduced the firm’s workforce by another 30,000 employees to 85,000, according to a presentation on Feb. 13.
Hommen won an extension from the EU on the restructuring plan in November after arguing markets, in Europe in particular, were too depressed to find enough buyers for assets.
During the fourth quarter he completed the sale of ING’s Malaysian insurance unit and its Canadian online bank, while agreeing to sell the U.K. online unit to Barclays Plc.
Beyond the Benelux region, ING has banking businesses in countries including Poland, Romania, Turkey, Thailand, India and China. Its online bank, ING Direct, is active in Spain, Australia, France, Italy, Germany and Austria.
Hommen had served on ING’s supervisory board from June 2005, and was chief financial officer of Royal Philips Electronics NV and Alcoa Inc. prior to that.
As CEO, he received an annual base salary of 1.35 million euros and hasn’t received any bonuses. In 2011, he waived a 1.25 million-euro bonus and a 2 percent raise after ING’s remuneration plan sparked criticism. Since then, the Netherlands has adopted legislation prohibiting so-called variable remuneration for board members of banks that receive state aid.
ING spokeswoman Victorina de Boer said no decisions have been taken yet on Hamers’s future pay package. She declined to comment on his current salary.
Hamers holds a Master of Science degree in business econometrics from Tilburg University in the Netherlands. Under his leadership of the Belgian bank, ING became the first lender to offer banking by smart phone in the country, he said in an interview with ING.World, the firm’s magazine for shareholders, in November. The Belgian bank has added 400,000 new customers since 2008, he said.
Hamers will join ING’s executive board if shareholders agree as well as the management boards of the banking unit and the combined European and Asian insurance operations.
--With assistance from Martijn van der Starre in Amsterdam. Editors: Simone Meier, Keith Campbell