THE HAGUE: Dutch bank ING, the country’s biggest lender, Monday announced 7,000 jobs could be lost mainly in Belgium and The Netherlands to save 900 million euros ($1.01 billion) by 2021.
The move is partly directed by the bank’s bid to reshape its services for the digital banking market, in which it said it would be investing some 800 million euros.
“Over the coming five years, around 7,000 functions might be impacted by these effects,” said chief executive Ralph Hamers.
Stressing the plans were not yet final, Hamer said the workforce could be reduced by some 3,500 in Belgium and another 2,300 in The Netherlands. The remaining posts were expected to be cut by external suppliers.
Belgian and Dutch unions reacted angrily, but analysts said the job losses were the consequence of the online transformation of the banking industry.
“Customers are increasingly digital and bank with us more and more through mobile devices,” Hamers said in a statement.
They “expect us to adopt new technology as fast as companies in other sectors,” Hamer said, adding ING needs “to offer a better customer experience, that’s instant, personal, frictionless and relevant.”
He highlighted that ING had been hit, like other European banks, by low interest rates in the eurozone and tough regulation.
But Hamers said later in an interview with the NOS Dutch broadcaster “that every job that disappears is of course one too many.”
The Amsterdam-based ING employs some 52,000 people in 40 countries around the world.
Saved by the Dutch government with 10-billion-euro bailout in 2008 amid the global financial crisis, it was forced by the European Commission to exit the insurance business.
It paid off the 10 billion euros plus interest that it owed the Dutch government in November 2014, well ahead of time.
Monday’s announcement comes after ABN Amro, the country’s third largest bank, said last month it was shedding 1,375 jobs over the next three years as it moves towards greater digitalization.
“Traditional banking is going to be considerably reduced,” analyst Thomas Cool told Agence France-Presse.
But he added the loss of 7,000 jobs was “a small number for the company itself”, adding “investors might see it as a better for profitability.”
And the markets seemed to take the announcement in their stride. ING were down 0.3 percent in midday trading on the Amsterdam AEX, which was up 0.4 percent overall.
Hamers acknowledged Monday that “banks are confronted with continuous regulatory burden and a prolonged period of ultra-low interest rates.”
He said: “these factors put pressure on the returns which are necessary to fund growth and investments, and cover our cost of capital.”
But the Belgian union SETCa called for a strike on Friday, the Belgian news agency Belga said.
While the Dutch FNV union urged ING to “opt for innovation and real jobs”.
“We will be watching closely to ensure that the loss of permanent jobs does not lead to an increase in temporary jobs,” said FNV leader Gerard van Hees.
In August, ING said it had boosted its operating profits by 26.7 percent in the second quarter to 1.4 billion euros and increased its lending by 15 billion euros on the same period in