ING Groep

ING Groep

27 October 2017Reading time: 3 minutes

A recent research conducted by Bank of America Merrill Lynch among worldwide fund managers shows that the sentiment about stocks within the Eurozone is very positive. Of all the surveyed managers, 57% expects that the European economy may improve within the next twelve months. This is far more than the 46% in September. The Bank also claims that going ‘long’ within European stocks is one of the most executed transactions.

According to Bank of America Merrill Lynch, the most important reason for this expectation of a further economic recovery within Europe is a worldwide economic acceleration. This may be followed by a recovery of the consumer demand within the Eurozone and a growth of the capital expenditures.

The surveyed fund managers are also claiming that German and French stocks are the most buy worthy, followed by Dutch, Swedish and Spanish stocks.

The largest risk according the fund managers see is a political mistake by the Federal Reserve or the European Central Bank, followed by the geopolitical risks about North-Korea and the danger of a crash on the worldwide obligation market.

At the end of May this year we wrote about the positive first quarter results of the ING Groep. The company continued this trend during the second quarter. The net profit increased on an annual basis with 5,9% to EUR 1.37 billion, while the underlying result before taxes remained almost the same at EUR 1.99 billion. During the last quarter ING also issued EUR 6.4 billion worth of new loans, while EUR 5.3 billion worth of savings was cashed. The third quarter results will be presented on November 2.

At the end of September, Moody’s increased their rating for ING Bank from A1 to Aa3, while the rating for ING Groep was maintained at Baa1. According to Moody’s, the increase is based on the expectation of a significant issuance of paid in capital and additional debts. Thus the company wants to meet future legal requirements. To improve their capital position, ING started on October 15, by redeeming perpetual obligations with a total worth of USD 500 million. Moody’s also claims that Dutch banks, in contrast to other European banks, have become more efficient thanks to several executed cost reduction programs. However the future development remains to be seen.

One of the risks for ING is the Brexit. Many financial companies decided to transfer their activities from London to other European countries. ING however, decided last year to transfer their operations in Amsterdam and Brussels to London. For now it is uncertain what the outcome of the Brexit negotiations between The European Union and the United Kingdom will be and especially what the impact will be.

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02/03/2021 09:26:34