ING CFO Timmermans to step down after money-laundering fine

ROME • ING Groep NV, under re after paying one of the biggest fines ever given to a Dutch lender, ousted CFO Koos Timmermans (picture), who had once been responsible for the division caught up in a money-laundering probe.

The 22-year ING veteran will stay in his position until a successor is found, the Amsterdam-based bank said yesterday, adding that it was appropriate for a senior executive to take responsibility for the scandal. During part of the period investigated by Dutch prosecutors, Timmermans headed the bank’s Netherlands unit, which was at the centre of the probe.

The CFO’s departure may buy some time for CEO Ralph Hamers, who faced a barrage of criticism from politicians and shareholders this year even before the bank agreed last week to pay about US$900 million (RM3.73 billion) to settle a Dutch investigation into corrupt practices by a former client. ING’s shares, among the worst performers among European banks this year, approached a two-year low.

“This resignation is likely to ease pressure on CEO Hamers to step down,” Robin van den Broek, an analyst at Mediobanca, said by email.

Timmermans, who hasn’t been accused of any wrongdoing, joined ING in 1996 and had been a member of the executive team since 2007, when he was appointed as the company’s first chief risk officer on the executive board. In 2011, he became vice chairman of the management board for banking. He was appointed CFO in 2017.

The Dutch investigation focused on the bank’s role in matters including unusual payments by the former VimpelCom Ltd to a company owned by a Uzbek government official. ING was suspected of failing to report unusual transactions or not reporting them in time. VimpelCom, which has changed its name to Veon, pleaded guilty in 2016 to violating US corruption laws.

According to the public prosecutor, the Amsterdam-based bank systematically failed to detect unusual payments as it under-invested in compliance.

“We deeply regret the shortcomings found and take this matter very seriously,” ING chairman Hans Wijers said yesterday in the statement. “Given the seriousness of the matter and the many reactions among stakeholders since the announcement, and in the interest of the bank, we came to the conclusion it is appropriate that responsibility is taken at executive board level.”

Some politicians welcomed the move. ING’s decision would have been more powerful if it had come a week earlier, but is a good signal, Roald van der Linde, a member of the ruling VVD party, said by email. “The most important thing now is that cultural change at ING comes with great force, at all layers of the organisation,” he said.

Eppo Bruins, another lawmaker from the ruling coalition, called the case “shocking” and said on Twitter that management is slowly starting to become aware of the seriousness of the the case.

ING acknowledged “serious shortcomings” in executing customer due diligence policies to prevent financial crime at its Dutch unit from 2010 through 2016. The investigation and fine have caused an uproar in the Netherlands, coming just months after ING had to backtrack on a pay boost for Hamers.

The cascade of bad news drove the stock to a two-year low last Friday. The shares, down almost 28% this year, fell 0.5% at 9:54am local time yesterday.

The tumult increased further last week after the Dutch daily Het Financieele Dagblad said that the bank had signalled to managers that information technology problems could threaten its business.

On Monday, ING’s home city of Amsterdam, whose finances the bank has handled since 1917, said it was putting that contract out to tender early, citing the money-laundering scandal and dissatisfaction with Hamers’ proposed pay increase. — Bloomberg


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