ING Shares Climb After Q3 Profit Beat and New Buyback Plan
The Dutch lender announced a €1.6 billion capital return to shareholders, capitalizing on strong fee income growth amid a robust European banking sector.
Shares in ING Groep N.V. (NYSE: ING) advanced in early trading after the Dutch financial services giant reported third-quarter profits that surpassed analyst expectations and unveiled a substantial new capital return program for its shareholders.
The Amsterdam-based bank announced a net profit of €1.79 billion for the quarter, comfortably beating the consensus analyst forecast of €1.66 billion. This performance was underpinned by robust growth in fee income, which surged by nearly 16% year-over-year, and a notable increase in customer lending, particularly within its Retail Banking division which expanded its loan book by €8.6 billion. The company's total income for the period was €5.9 billion, also exceeding market expectations.
In a move signaling strong confidence in its financial position, ING's management announced a shareholder distribution plan totaling €1.6 billion. This package includes a new share buyback program of €1.1 billion, expected to commence imminently, along with a €0.5 billion cash dividend. The announcement was a key driver of positive investor sentiment, highlighting the bank's capacity to generate excess capital.
Following the news, ING's American Depositary Receipts (ADRs) were trading around $24.17 on the New York Stock Exchange. The bank, with a market capitalization of approximately $70.7 billion, has seen its shares perform strongly over the past year, trading near a 52-week high of $26.28.
ING's strong results come amid a favorable environment for the European banking sector, which has benefited from higher interest rates. The S&P Europe BMI Banks index, a key benchmark for the industry, rose 14.71% in the third quarter, outpacing counterparts in the U.S. and Asia. This broader industry strength has been reflected in the performance of ING's continental peers.
Earlier this month, Germany's Deutsche Bank reported a record profit before tax of €2.4 billion, while Spain's Santander achieved a record attributable profit of €3.5 billion, marking its sixth consecutive record-breaking quarter. This backdrop suggests a widespread tailwind for established European lenders, allowing institutions like ING to capitalize on the macroeconomic climate.
While the bank's quarterly profit showed a slight 5% decrease compared to the same period last year, the better-than-expected result and the significant shareholder return have reinforced its standing as one of Europe's more stable financial institutions. The growth in core lending activities indicates healthy underlying demand from customers, providing a solid foundation for future earnings.
Investors will now be watching to see if ING can maintain its momentum in fee generation and lending growth as the market anticipates future moves by the European Central Bank. The latest results and capital return plan, however, position the bank strongly as it heads into the final quarter of the year.