By Maarten van Tartwijk
AMSTERDAM--Dutch bank ING Groep NV Thursday said it will move
ahead with plans to float its NN Group insurance business in what
is likely to be one of Europe's biggest initial public offerings
this year.
ING said it would float a minority stake in NN on the Amsterdam
stock exchange in the coming weeks, if market conditions stay
favorable. ING Chief Executive Ralph Hamers said the sale could
happen at "any moment" and that the stake will be "sizable."
Analysts value NN at between EUR6 billion and EUR8 billion ($8.2
billion-$10.9 billion).
The NN IPO marks the final and most significant step in an
overhaul imposed by the European Commission following a government
bailout in 2008. ING was ordered to sell its global insurance
business and has to sell at least 50% of NN before the end of 2015.
ING has already disposed of insurance assets in the U.S., Latin
America and Asia.
Europe's IPO market has gathered steam in recent months, with a
series of share sales currently under way. The U.K.'s Lloyds
Banking Group PLC said it plans to float its TSB retail banking
unit on the London Stock Exchange later in June.
To woo investors, ING said NN will pay a dividend of EUR175
million over the second half of 2014 and that it will target a
payout policy of 40% to 50% of its operating result from 2015. In
addition, excess capital could also be returned to shareholders, it
said.
NN, which employs about 12,000 people, includes life insurance
and asset-management operations. It generates most of its income in
the Netherlands but also has a presence in more than a dozen other
countries, including Belgium, Poland and Japan.
Analysts have questioned NN's growth prospects, as it struggles
with a difficult home market and a large closed book of variable
annuities in Japan. NN last year reported a pretax loss of EUR52
million.
NN is also dogged by lawsuits from clients in the Netherlands
who claim they were charged excessive fees on certain unit-linked
insurance plans. The company in 2009 agreed to pay out hundreds of
millions of euros in compensation, but has warned that a flood of
new lawsuits may result in additional costs.
"We still have a number of clients that are not happy with the
products we have sold," said Lard Friese, NN's CEO Thursday. "It
isn't possible to give a reliable estimate on the financial
consequences."
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com