ING Barings, the Dutch financial group, is to cut 500 jobs from its investment banking operations in the City of London as part of a global shake-up of its business.

ING also announced that it is to sell its US business to Dutch rival ABN Amro for $275m (�188.6).

More than 1,000 staff will transfer across to ABN Amro in the US, but 200 jobs will be lost there, and a further 300 axed elsewhere in the world.

ING is hoping to see savings of 500m euros (�314.8m) as a result of the reorganisation.

And Dutch financial services group ING said it expected a profit of $37m on the sale of the US subsidiary.

Growth targets

Most of the job cuts affect support staff rather than bankers. But many might leave after late February when bonuses are paid.

An ING spokeswoman said that between 150 and 175 London staff would be offered redundancy, with the remaining job losses made up of agency employees and "the normal outflow" of staff.

ING stressed that it was still committed to the investment banking side of its business, despite analyst expectations to the contrary.

It will now focus on maximising synergies by integrating the investment banking business of Europe, Latin America and Asia.

The group aims for corporate and investment banking profit growth of 40% this year. It has already forecast profit and share growth of at least 20% when's its 2000 year results are announced.

High-profile entry

ING had made a high-profile entry into investment banking in 1995, acquiring for a token �1 the UK bank Barings that collapsed after the infamous derivatives trader Nick Leeson racked up huge losses.

Two years later, ING bought US securities firm Furman Selz for $600m and integrated it into ING Barings.

Further investments have since been made.

But last November, the bank announced that it was mulling the future of Barings' US business and hired Goldman Sachs to advise it on a reorganisation.

Modest position

But analysts said ING - based on retail banking and insurance - had not come to terms with the global investment banking market.

It had built only a modest position in the US and failed to make the costly investments, particularly in staff, needed to compete with Wall Street's top firms.

But while one Dutch firm bows out of the US, its compatriot firm ABN Amro has high ambitions in the same sector.

ABN Amro said it expected its US business to make a profit from 2002 after the integration was completed, and hoped that this would yield yearly cost savings of more than $20m.