Dutch lender ING announces new buyback programme, Q3 net profit beats estimates
ING Groep, the largest Dutch bank, on Thursday (Nov 2) announced its second share buyback programme of the year, of up to 2.5 billion euros (S$3.6 billion), following third-quarter net profits that more than doubled from the previous year.
However shares were down as much as 4.8 per cent in morning trading, with some brokers pointing to a poor beat in third-quarter income estimates. By 0938 GMT they were 2.7 per cent lower.
“It seems that investors are looking at the ‘low’ quality of the beat in income estimates, which was driven by other income and very low risk costs”, Rodger Rinke from Landesbank Baden-Wuerttemberg said.
Net interest income (NII), a key measure of earnings on loans minus deposit costs, was also lower than expected, he said.
The bank’s net profit more than doubled to 1.98 billion euros between July and September, beating a 1.83 billion euro company-compiled consensus forecast, but NII reached 4.03 billion euros in the quarter, below 4.12 billion euros expected.
ING, which serves more than 38 million customers, also said it remains vigilant as global economic growth is slowing.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Banks have been some of the main beneficiaries of rising interest rates over the past two years, but central banks seem now to be at the end of this cycle of monetary tightening.
Net additions to loan loss provisions amounted to 183 million euros, below the 322 million euros expected in the company-compiled consensus, partially due to what chief risk officer Ljiljana Cortan described as “successful de-risking from Russia”.
The company’s common equity tier-one capital (CET1) ratio, the measure of solvency for European banks, rose to 15.2 per cent in the quarter, the group said, adding it targeted a ratio of around 12.5 per cent, above the requirement of 10.98 per cent.
“It remains unclear how the bank wants to reach its 12.5 per cent CET1 target. There is still more than 9 billion euros in excess capital and the management has to outline the path to their goal,” Rodger Rinke said. REUTERS
Share with us your feedback on BT's products and services
