ING Holding Steady, But That's Not Enough To Move The Shares

 Given the chaos in the global economy, a relatively stable set of results from ING (ING), at least on an adjusted basis, is probably welcome. Considering the longer term, though, this is a bank that needs to prove to the Street that it can leverage heavy investments in digital technologies to break out of a general malaise that has hit more traditional banking-focused European operators and led to sustained weak valuation multiples.

ING shares have done okay since my last update, rising about 16% in the local market (closer to 25% for the ADRs) and handily outperforming the Europe 600 Banks Index. I continue to believe that these shares are undervalued even with a relatively weak long-term outlook for core growth. A key issue, apart from macro drivers like rates, is convincing investors that a primarily traditional banking operation can somehow break from the pack and generate attractive returns relative to the cost of equity, and I see that as a major to-do item for the new CEO.

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ING Holding Steady, But That's Not Enough To Move The Shares