Internationale Nederlanden Bank NV will give up its U.S. branch banking license in November and set up a licensed broker-dealer, finance company, and derivatives trading institution instead.
ING Bank, the U.S. unit of the $109 billion-asset Dutch bank, in Amsterdam, is canceling its New York State banking license after failing to resolve legal difficulties stemming from the 1990 merger of Nationale Nederlanden NV, Holland's biggest insurance company, and NMB Postbank Group, the country's third-biggest bank.
"We very much regret that we have had to give up our commercial banking business," said Lane Grijns, executive vice president for international and regional manager for North America.
Common Ownership Barred
U.S. banking law prohibits common ownership of banks and many kinds of insurance companies.
In November 1990, the Federal Reserve Board temporarily exempted NMB Postbank from the ban but severely curtailed U.S. expansion by both the insurance company and the bank.
The exemption, due to expire in March 1995, was originally viewed as a sign of increased flexibility by U.S. banking regulators in light of the large number of mergers between European banks and insurance companies.
However, Fed officials subsequently specified that unless U.S. banking legislation changes over the next four years, the ING group would have to relinquish its banking or its insurance license.
"The Fed is forcing the issue because of the prohibition insurance," one source said.
ING Bank, with $3.8 billion in U.S. assets, has one branch in New York and an Atlanta agency.