ING said today that it should complete its restructuring two years ahead of schedule.
This means that the Dutch banking and insurance group could be one of the first euro zone casualties of the 2008 global crisis to emerge from a state rescue.
Cutting free of the state is seen as an important step for ING, removing a European ban on acquisitions and giving it greater pricing flexibility so it can compete more easily.
Major US banks repaid much of their emergency government aid in months, allowing them to stay competitive, but in Europe it is taking years to unwind a series of bailouts stretching from Belgium to Greece.
Like its Dutch rivals ABN Amro and Rabobank, ING had a strong international presence at the time of the financial crisis, with a network far larger than its tiny home market.
Both ING, which required a €10 billion bailout by the state, and ABN Amro, which was nationalised, were forced to retreat from their global empires to focus on Europe, where business is hampered by anaemic economic growth.
But ING reported better than expected third quarter net profit of €101m today, repaid another tranche of state aid, and said it has also made progress on divesting assets as outlined in the restructuring plan.
"Under a new agreement with the European Commission, the total restructuring of ING Group will now be completed two years earlier, by the end of 2016," chief executive Ralph Hamers, who took over from Jan Hommen in October, said in a statement.
Hamers said the divestment of ING's Asian insurance and investment management activities was almost complete, while the group was on track with plans for an initial public offering of its European insurance unit.
That IPO will now include ING's Japanese life insurance business, avoiding a fire sale or distressed price for a unit which had proved difficult to sell separately.
In October 2008, ING warned of its first-ever quarterly loss and watched its shares lose a quarter of their value in one day, taking a Sunday-night bailout of €10 billion from the Dutch government.
ING has raised about €25 billion, including pending deals, as it shed a host of insurance, investment management and other assets in the US, Latin America and Asia through disposals or listings, and is cutting thousands of jobs to raise funds with which to repay aid and bolster its capital.
It paid another €1.125 billion to the Dutch state today, including premiums and interest, bringing the total amount repaid to €11.3 billion. That leaves €2.25 billion in principal and interest still to be repaid in two tranches in March 2014 and May 2015.
Last week ING ended another tie with the state when the Dutch government said it would sell a €6.4 billion portfolio of US Alt-A mortgage securities that it took over from the troubled financial group during the crisis in order to reducerisk and uncertainty. That news prompted speculation that ING would try repay state aid ahead of schedule.
ING's next big divestment, of its European insurance unit, is expected in 2014 either via an initial public offering ,spin-off, trade sale or some combination.
ING said its better than expected third quarter net profitwas lifted by higher net interest margins and cost savings.