Scotiabank announced Wednesday it has reached an agreement to buy ING Bank of Canada for $3.13 billion in cash.

The company said its acquisition, known as ING DIRECT, will continue to operate separately and the transition should be seamless to its 1.8 million customers.

"Scotiabank is committed to preserving what ING DIRECT's customers have come to love about it," the company’s head of Canadian banking, Anatol von Hahn, said in a news release, adding that ING customers’ existing account numbers and passwords won’t change.  

ING DIRECT is the 8th largest bank in Canada with approximately $40 billion in assets, $30 billion in deposits and 1,100 employees. It has no physical branches, so customers manage their accounts online or through mobile devices and make deposits or withdrawals at ATMs.

ING arrived in Canada in 1997, touting its no-fee banking services, including high-interest savings accounts. ING also offers mortgages and mutual funds.

"ING will now benefit from a strong stable Canadian owner who will provide additional resources to continue to expand and to grow," Scotiabank president and CEO Rick Waugh said during a conference call with analysts Wednesday.  

ING DIRECT’s Netherlands-based parent company, ING Group, has been struggling to overcome declining margins and bad loans amid the European financial crisis.

ING Group sold its U.S. division to Capital One for US$600 million in February. It still runs divisions inAustralia, Austria, France, Germany, Italy and Spain.

Scotiabank said the Canadian deal, which is subject to regulatory approval and is expected to close in December, will add to its earnings within the first year.

In a statement, CEO of ING Group Jan Hommen, said Scotiabank will be a “complementary owner with the ambition to further grow the business.”

Scotiabank also announced a public offering of 29 million common shares at $52, with a goal of making $1.5 billion in gross proceeds to fund the acquisition.

The bank reported this week that its profits grew by 57 per cent in the third quarter, boosted by improved performances in several divisions and the sale of Scotiabank headquarters in Toronto.

With files from The Canadian Press