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# ING Groep N.V. Message Board

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• jpomper jpomper Jun 19, 2011 4:28 AM Flag

## Value to Shareholders

I have a different view on this.

1) We have a loss of cca. 85B banking assets from a total of 927B. Since ING DIrect's ROA, ROE and cost ratio is similar the ING bank total, this is clearly a loss of 85B/927B=9.1% from the banking business.
2) We lost a 269m underlying earnings power from a total of 1695m in banking, which is 15%. This numbers are from 2010Y annual report.

3)So, we probably lost somewhere between 9% and 15% of the banking business, depending how you see it, for 9.0B selling price

4)Now, if \$9B is 9% or 15% of the value of ING, then the total ING is valued in this transaction to: \$9/0.09=100B, or 9B/0.15=60B,
which means total ING is valued at present \$60-100B,
or with 3.78B shares \$15-\$26/share.

5)Currently we are at \$12/share, se the stock market is undervaluing ING compared to this transaction 25-100%.

If you sell something for 25%-100% more than it is valued at NYSE, it might be considered a good deal.
or is it?

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• Well, let' take a look at it from another wievpoint.

1)Include into the calculations the ING Insurance business.
Insurance total Assets are 325B, from ING total assets of 1250B, this is 26%.

Its share from Equity total of 46B is 20B, this is 43%.

Insurance underlying result is 461m from the total ING undarlying result of 2150m, this is 21%.

2) Take an average of the above numbers, and you get to the conclusion that ING Insurance Business is cca. 30% of the total value of ING.

3)If ING Direct is worth \$9B today, and it is cca. (9%, 15% average) 13% of ING total value,
then a 30% share of ING should be valued at cca. \$21B. So, by the present market transaction ING Insurance should be valued at cca. 21B.

4)Now, add to ING banking Busines value (see previous post) of cca. \$80B (since it is valued between \$60 and \$100B) the Insurance Business value of cca. \$20B, you get a total ING value of \$100B today.

5) And you get for ING Direct only \$9B?
Or is it?