Saturday, August 25, 2018

ING Putting Investors Through Dutch Water Torture

This has been a tough year for European bank stock investors, with very few banks showing much if any gains so far this year (Swedbank's (OTCPK:SWDBY) meager 5% return makes it one of the outperformers) and the Benelux banks continuing to do fairly poorly, and ING Groep (ING) underperforming in particularly with a year-to-date 20%-plus fall. There are a lot of reasons for the weakness, including relatively modest rate leverage, worries about economic growth, and concerns about capital, but in the case of ING, I believe the primary concern remains the slow pace of growth, with issues regarding capital and Turkey cropping up more recently.

I admit some concerns that ING is slipping into a Societe Generale-like (OTCPK:SCGLY) morass of being unable to hit its earnings, capital, and return goals, but in fairness to ING, there have to be quite a few additional disappointments before they get there. Still, I think the point stands that for the value that there appears to be in ING shares today, investors have to at least consider the risk that growth will come in meaningfully below already-low expectations.

Read more here:
ING Putting Investors Through Dutch Water Torture

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