Dutch financial group ING could soon announce outsourcing of some divisions in the Benelux region, according to a letter from the group's CEO to employees received by Reuters on Saturday. Michel Tilmant, chief executive of Europe's biggest insurance group according to its market value of almost $60 billion, said stagnating revenue growth in the saturated Dutch and Belgian financial markets meant costs had to be cut.
"ING operates in the Benelux in a mature market where there is limited room to realise organic growth. To remain competitive in this mature market, continuous attention to cost control is very important," Tilmant said in the internal letter sent to employees on Friday.
In outsourcing companies contract outside companies to do work previously done in-house.
"Outsourcing is one of the possibilities that would result in structural cost control. Like our competitors we have already stated that we are looking at the possibilities of outsourcing," Tilmant said. Managers in the Netherlands and Belgium have asked various business segments to examine whether outsourcing would be sensible and unions were aware of the situation, he said.
ING has been selling non-core assets as it focuses mainly on life insurance plus retail and wholesale banking in Benelux, the United States, Asia and developing markets.
The group is using money from the sales to boost its capital base and make small and medium-sized acquisitions in its core businesses.