ING May Be Through The Worst Point Of The Cycle

Not a lot has gone right for ING Groep (ING) in 2019. Despite being generally regarded as a well-run bank, ING has gotten caught up in and dragged down by most of the same macro challenges that have hurt other banks, including sluggish GDP growth across much of its operating area, political turbulence, and even weaker rates. At the same time, ING has been dogged by some more company-specific issues including higher compliance expenses, a high retail (and retail spread) skew, and a higher reliance on swap rates.

I’m not necessarily expecting 2020 to be dramatically better, but I don’t think it will be worse, and maybe the idea that earnings have finally been revised down far enough will be enough for ING to start performing a little better. These shares have risen more than 10% since my last update, but still remain undervalued if the company can muster just low single-digit long-term core earnings growth. With what I believe to be low expectations, a high dividend, and a sound capital structure, I think ING shares still have some appeal.

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ING May Be Through The Worst Point Of The Cycle