ING sells to Warren Buffett
TEXT OF STORY
Doug Krizner: The major banks are in dire straits since the credit crunch. They’re short on cash. Here’s a remedy: sell off some businesses. The Dutch bank ING is unloading its re-insurance unit to Warren Buffett’s Berkshire Hathaway. From our European desk, Stephen Beard reports.
Stephen Beard: ING has sold Warren Buffett its re-insurance unit. The price: $435 million.
The official reason for the sale is streamlining. ING says it wants to focus on its core insurance and banking business. Some analysts suspect another motive. They say the move has more to do with the credit crunch, with ING shoring up its capital.
According to the Wall Street Journal, other big investment banks are likely to do the same. Citigroup could sell off up to $12 billion worth of assets. HSBC might unload $13 billion worth. The banks could also resort to other means of repairing their capital.
This week, an analyst with Goldman Sachs predicted that Citigroup will cut its dividend by 40 percent. Citigroup declined to comment.
In London, this is Stephen Beard for Marketplace.
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