The first of this month Jan Hommen left his post at ING and was decorated ‘Commander in the Order of Orange-Nassau’ – if that is the correct translation of one of the highest Dutch royal honors.

How about that?

 Not a nice bank

Let’s first observe the biggest Dutch bank targets gullible clients among who – for may years – I count myself. ING manages more than 115 billion Euros in Dutch bank savings making it the largest household bank in the nation yet is also among the international banks offering the lowest interest rates.  Moreover, ING’s ethical considerations are not a priority to the bank. De Eerlijke Bankwijzer, a widely respected Dutch comparison website notes:

“The arms policy of ING is dubious (5 points out of 10). ING bars producers of controversial arms and companies which ignore arms-embargo’s too. This policy is limited solely to business finance however, so arms supplies of other companies to controversial regimes are not ruled out.”

One particular research project (praktijkonderzoek kernwapens, 2013) revealed ING manages stocks and bonds of 20 nuclear arms manufacturers to the amount of €658,2 million and extends credit through bank investments for an additional €318,3 million’; and this is ‘just’ about arms!  Opportunism rules financial institutions: ING scores a mere 3 out of 10 for its policies on ‘taxes and corruption’ and does just as poorly on ‘climate’.  To the outside world, ING regularly makes a show of concern on social justice and environmental matters and pays – mainly token – tribute to them such as seen in this clip from RTL.

 Small things

Nonetheless, it is the small things I find most telling.  Take, for example, the conversation my (then) 87-year old mother had with an ING-employee she had called because each month money was taken out of her account for a lottery even though she’s always been a staunch opponent of lotteries derisively referring to them as a stupidity tax. The ING-helpdesk man didn’t believe her, (even though shady practices of lotteries were all over the internet at that time) and had the audacity to say: ‘If you had won, you’d have been really happy, wouldn’t you?’ as if he were talking to a child.  Great consumer contact policy: defend the scammer and denigrate the old lady who calls to report a crime.

Of course, ING never took any responsibility for its role in the 2008 credit-crisis.  The bank had no qualms about receiving a ‘capital injection’ of 10 billion Euros financed with Dutch tax revenue and allowed the state to buy its tanked mortgages – which have since lost half their value – all the while enjoying additional guarantees, valued at over 32 billion Euros. And yet; ‘sorry’ was too hard a word.

Though the bank gained strength by virtue of a wave of privatization which swept away crucial public services such as the postal and railway systems, ING wouldn’t have flourished without the naiveté of the general public.

 Willingly led to the counter

It all started so well in 1881 when the state savings post-bank (Rijkspostspaarbank) was created in order to stimulate workers to save.  All benefits came to its clients, and, of course, to the state which was, at that time, all of us: fantastic! By 1919 this bank had morphed into the so called Postgiro which was way ahead of its time in automation and grew to have millions of clients.  Privatized in 1986 and renamed the Postbank, most people, including me, were willingly and quietly eased into this new private bank which suddenly had billions in savings to invest at the discretion of a private board of directors.  Money was rolling around in Uncle Scrooge McDuck-fashion and the newly appointed bankers were given an enormous play-pen.

Showing off with other people’s money

The newly privatized managers of the once sober public savings institution sponsored Formula-1 racing and snapped-up  foreign banks and insurance companies willy-nilly. The first years were a virtual shopping-spree with an 800 billion guilder tab – five times the entire state budget.  By some estimates 93 to 95% of the expenditures were financed with the private savings of Dutch citizens as collateral; it wasn’t even the banks money, but ours!  Differently put: ING’s equity stake represented merely 5 tot 8% of what they spent. What was their aim? Why all this international expansion?  Was it the huge salaries and bonuses? Was it to foot the bill for staying at the most expensive hotels and mingling with the world’s jet-set?  ING wanted to be big and international – growth! growth! growth! – so they took enormous risks, bought the wrong companies, gave easy credit to weak businesses and caused hundreds of millions of Euros to evaporate.

‘All the boys did it, Sir’

And yes, they bought a pile of mortgages without thinking or caring that one day people might be unable to repay their debts – and the rest is history.  Their defense? “All the boys did it sir, we only went along with them.” We’ve heard it before: as long as things go well one pays himself and his friends insane salaries and bonuses and when things go sour the buck is passed to the community; you and me. And yet: no regrets from the bankers; ‘we knew nothing about it’.

ING’s topman Michel Tilmant, Jan Hommens predecessor, had a yearly paycheck of €6 million and a severance package with a pension-payment worth another €3 million.  Make no mistake, this man absolutely refuses to be interviewed, while overseeing the construction of what looks like a French villa. (Watch Zembla, 2009.)

After the state had intervened to curb ING’s excesses in 2009 Hommen was brought on with an annual base salary of  €1,3 million though he subsequently went on to make an additional €50k per annum.  €5.200 per day may not be astronomical by American standards, but it still represents a 62 fold increase over the middling wage in Blaricum, the wealthiest town in the Netherlands.

Hommens merits

What would Hommens merits have been? Under his leadership, the €10 billion capital injection is mostly reimbursed to the state; that’s fine and it is extensively documented on one of ING’s websites, which, by the way, makes no mention of the devalued mortgages the state bought from the bank.  What could ING’s CEO have done over the past four years other than clean up the mess his megalomaniac predecessors had made?  So Hommen sold some dubious acquisitions. He also fired tens of thousands employees; though he was able to do that without insulting them as ING chairman of the board Nick Jue did when claimed he worked hard while “ladies on the work floor sat on their fat asses.” (NRC, 2013)

So, maybe Jan Hommen does deserve his royal medal but, to me at least, the evidence is pretty thin.  I can’t know much about all that went on but when I come across ING’s malpractices in Singapore, which happened under Hommen’s watch and will likely cost ING a whopping €700 million in fines, I worry about who picks up the tab. As taxpayers we’re powerless, but as ING clients we would do well to get the hell away from this bank and find any green, ethical and responsible bank instead.*⁾

*⁾  In the Dutch version of this post (Oct 1st), which is somewhat updated here, I suggested the bank I went to myself. Although I don’t really care which other ‘good’ bank one chooses, this led to some discussion.