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ING Group’s Impressive 4Q Earnings and Vision for FY24

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Mohamad Faizal Bin Ramli

ING Group made headlines with its impressive 4Q earnings and bold vision for FY24. The multinational banking corporation, listed on the NYSE as ING, reported a noteworthy net result of €1,558 million for the fourth quarter, signifying a massive 43.1% increase from the same period in 2022. Such a substantial surge can be attributed to a combination of higher income and reduced risk costs, reflecting the company’s adept risk management and revenue-generating capabilities.

Positive Financial Performance

Notably, ING’s total income in 4Q2023 reached €5.41 billion, marking an 11.1% year-over-year increase. The effective tax rate during this time decreased to 27.6% compared to 33.6% in 4Q2022, indicating an improved financial efficiency. Moreover, the company witnessed an increase of 236,000 primary retail customers in the fourth quarter, reinforcing its position in the market. Alongside this growth, ING achieved stable deposits and saw positive developments in lending. The full-year return on equity also rose to a commendable 14.8%, demonstrating the company’s robust financial health.

Stable Financial Foundatation

Further illustrating its robust financial position, ING reported a proposed final dividend of €0.756 per share, amounting to a total distribution of €7.8 billion, thereby providing value to its shareholders. Additionally, the company’s net additions to loan loss provisions totaled €86 million, showcasing its diligent risk management practices. The Common Equity Tier 1 (CET1) ratio, a key indicator of a bank’s financial strength, stayed strong at 14.7% at the end of the year. While this was a slight dip from 15.2% in 3Q2023, it still reflects the company’s sturdy financial foundation. The leverage ratio remained stable at 5.0%, further underscoring the stability and consistency of ING’s financial position.

Bold Vision for the Future

Steven van Rijswijk, CEO of ING Group, expressed the company’s resolute vision for the future by stating, “Looking ahead, we remain vigilant given the ongoing geopolitical uncertainties and remain focused on delivering value for all our stakeholders. We’re confident that we’ll be able to continue to deliver a sustained return on equity of 12% as economic indicators further stabilize by building on our strong and growing customer base and our good performance.” This remark conveys the company’s commitment to fostering sustainable growth and creating value for all stakeholders, even amidst global uncertainties.

Insightful Outlook for FY24

ING’s outlook for 2024 reflects a calculated and pragmatic approach. The company aims to maintain strong total income in a positive rate environment, with a projected growth in fee income by 5-10%. Additionally, a total cost growth of approximately 3% (excluding incidental items) is anticipated. Notably, ING sets its sights on converging the CET1 ratio towards its ~12.5% target by 2025 while also forecasting a return on equity of 12%. This forward-looking approach mirrors the company’s focus on sustainable growth and long-term value creation for its stakeholders.

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