ING CEO advocates for smaller M&A deals, Commerzbank not digital enough

Authors: Gianluca Lo Nostro and Matteo Allievi

(Reuters) – Dutch bank ING Groep is looking for more local mergers and acquisitions, focusing on targets with a strong digital offering, its chief executive said on Thursday, adding that Germany’s Commerzbank did not meet the requirements.

Group CEO Steven van Rijswijk said ING would only consider deals that could accelerate the company’s operations or enable it to recruit new staff.

“First of all, no very big restructuring. (Companies) also have to compete with a digital mindset, because if the culture of another bank is bricks and mortar and not digital, it doesn’t work,” he told Reuters in an interview.

“And if we compare it to a company like Commerzbank… I think we know the answer,” he said when asked about the German lender, pointing to its international presence and large branch network.

While there are no plans to sell Germany’s remaining 15% stake in Commerzbank, Finance Minister Christian Lindner said in January that he did not oppose such a deal.

European banks are flush with cash thanks to higher interest rates and strong profits, and their stocks are at multi-year highs, prompting speculation that there could be more merger and acquisition activity in the domestic market, although finalizing deals has not been easy.

The Netherlands’ largest bank by assets raised its 2024 total income forecast to more than 22 billion euros ($23.75 billion) after posting second-quarter net interest income that beat estimates.

Van Rijswijk said ING’s net interest income remained strong throughout the year, driven by higher deposit inflows and loan origination, and margins should remain stable in 2025 as interest rates are expected to gradually decline.

(1 dollar = 0.9263 euros)

(Reporting by Gianluca Lo Nostro and Matteo Allievi; Editing by Jason Neely, Kirsten Donovan)