The Bank of Nova Scotia (TSX:BNS) announced August 29 that it has reached a definitive agreement to purchase ING Bank of Canada from Netherlands-based parent ING Group for $3.126 billion in cash.
The transaction is expected to result in Scotiabank making a net investment of $1.9 billion after it deducts capital currently at ING Direct. The acquisition is subject to regulatory approvals.
Scotiabank also announced a public offering of 29 million common shares at $52 on a bought deal basis to raise $1.5 billion to fund the acquisition.
Unlike Scotiabank, which ranks as B.C.’s fifth biggest bank with 134 branches and 2,557 employees in the province, the ING Direct brand advertised itself as being not like a typical bank.
It had no physical branches and neither charged service fees nor required a minimum balance in client accounts. The company also marketed itself to British Columbians by paying higher-than-average interest on bank accounts.
ING also recruited new customers by offering cheaper and more flexible mortgages than the so-called “big banks.”
With approximately $40 billion in assets, $30 billion in deposits, 1.8 million customers and over 1,100 employees, ING DIRECT is the eighth largest bank in Canada.
Scotiabank, meanwhile, has $660 billion in assets, $461 billion in deposits, 354 billion in loans and 3,100 branches as of April 30.
