Bank of Italy Asks ING to Hold Off New Customer Transactions - EcoFinBiz Blog

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Bank of Italy Asks ING to Hold Off New Customer Transactions

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(Bloomberg) -- The Bank of Italy requested ING Group to refrain from engaging in transactions with new customers after an inspection revealed the lender wasn’t compliant with anti-money laundering legislation.

The central bank took the measure following a four-month on-site inspection that ended in January, it said in a statement on its website. Transactions with existing customers aren’t affected by the move.

ING said in a separate statement it’s taking the necessary steps to improve processes and management of compliance risks as required by the Bank of Italy, in line with an enhancement program announced last year regarding shortcomings in AML processes.

ING Groep NV is struggling to move on from its money laundering woes, six months after paying one of the biggest fines ever levied on a Dutch bank. The bank agreed to pay 775 million euros ($878 million) to settle an investigation by a Dutch prosecutor into issues including money laundering and corrupt practices in a criminal case last year. The lender acknowledged “serious shortcomings” in executing due diligence policies to prevent financial crime at its Dutch unit from 2010 to 2016.

Following the Dutch fine, Chief Executive Officer Ralph Hamers emphasized on multiple occasions that the bank had learned its lesson. Koos Timmermans, who was the chief financial officer, resigned after public discontent and the bank is on a hiring spree for compliance staff.

ING has been in Italy since 2001 with its retail bank, where it employs about 900 workers in a country where it generated 231 million euros in revenue last year, according to its annual report. Italy is part of ING’s so-called challenger markets, where ING plans to grow by being fully digital, without branches.

The request from the Bank of Italy is another blow to Hamers, who’s goal is to to build a single platform to serve all its retail banks in Europe. For its challenger markets, ING has built what it calls “Model Bank.” After Czech Republic became the first country to go live on this platform, ING was planning to start integrating customers in Spain, France and Italy onto the system this year.

ING shares have risen 18 percent this year, compared with the 10 percent gain in the Bloomberg Europe 500 Banks And Financial Services Index.

--With assistance from Lorenzo Totaro and Tommaso Ebhardt.

To contact the reporters on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net;Robert Lavelle in New York at rlavelle@bloomberg.net;Ruben Munsterman in Amsterdam at rmunsterman1@bloomberg.net

To contact the editors responsible for this story: Chakradhar Adusumilli at cadusumilli@bloomberg.net, ;Chad Thomas at cthomas16@bloomberg.net, Alessandra Migliaccio, Linus Chua

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