ING Investment Management, the insurance and asset management arm of ING Groep NV, the first Dutch bank to tap a government’s rescue package, is also restructuring its operations in India to boost efficiencies and generate returns. Hans van der Noordaa, Chairman & CEO, insurance & investment management Asia-Pacific, speaks to Gautam Chakravorthy on the mood, the markets and future plans.
What’s your view on the current situation?
People are becoming risk-averse. All kinds of sectors have been affected by the slowdown. Only travel in Europe does not seem to be affected. Banks have seen enormous flow of deposits, but they are not lending money to individuals and companies who do not meet the criteria.
Europe and other countries are going through restructuring phases. Everybody is on a cost-restructuring process. In Asia, many local players have evinced interest to buy assets that are on sale. I am not sure if international companies will sell assets to local companies. I see quite a bit of nationalism. Over time, people will look at other opportunities.
I am worried about the tension between Europe and the US on reducing deficit. I understand the dilemma, but worry about the next crisis. The global landscape is changing.
How do you view Asia?
For Asia, I am optimistic. In Asia, there are states bigger than our countries. I am not optimistic about Japan as their economy is dependent on the US. But you have a young population and rising wealth. The domestic market is big.
Any change of strategy in China and India?
For Asia-Pacific, we are evolving a country-by-country strategy. We are reviewing our investments in China. We are a bit skeptical about our interests in the financial services sector in China. We have two joint ventures there, with 25 foreign joint ventures operating there overall.
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These 25 joint ventures have 5 per cent of the market, which is very small. But local companies are growing faster. On the banking side, some of the big players have sold stakes and are getting out. We looked at the opportunities to start our own bank in China. For the time being, it is not a priority. I am pessimistic about China.
However, I am optimistic about India, though there are political compulsions about stake-holding in insurance. Of course, there are restrictions on the banking side. But it is less restrictive compared to China.
How has ING fared in this market?
ING’s business in India has also been affected. Our mutual fund’s market share was 2 per cent last year. Now it is less than 1 per cent. We are in the middle of a strategic review. It is time to rethink our stance, given that we grew fast in the past few years. It does not help to be in the 36th position in India. We will soon come out with the conclusions. We did lose some ground in India.
The future strategy in India will be more about consolidation, reducing costs and boosting efficiencies, increasing productivity of partners and upgrading quality of distributors. As part of the consolidation and cost-cutting, we did cut about 300 jobs, including natural attrition. We are very conscious about hiring now.
Will you look at acquisitions?
We are small but unique. We have an open mind on acquisition. You cannot exclude anything in India.