Dutch banking group ING has disclosed plans to invest EUR94 million in restructuring its Belgium operations over the next five years as it tries to strike the right balance between personal service and direct channels.
ING - which has pioneered the direct banking approach in its international operations - says although direct channels like the Internet and call centres are increasingly used, its customers in Belgium continue to use branches for more complex transactions.
The bank says it will "strengthen" its distribution channels in Belgium by investing in adding new functionality to its Internet banking platform and doubling its call centre capacity.
In parallel, ING will restructure its branch network in Belgium transforming its current 794 branches into 242 full service branches and 552 smaller outlets with automated self service cash functions.
ING says the EUR94 million investment over a five-year period is expected to contribute positively to the P&L as of 2009 and is expected to generate additional annual pre-tax earnings of over EUR100 million in 2012.
The additional earnings will arise from improved product and distribution capabilities as well as from increased efficiency, says the bank.
News of the investment comes as ING reports a 47% rise in third quarter profit, which was boosted by high investment income and a gain form the sale of part of its stake in ABN Amro.
However results from ING Direct fell 32% due to a loss in the UK. At its second quarter results in August, ING said it is investing EUR65 million to accelerate commercial growth at ING Direct.