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ING Groep N.V. Message Board

  • ajsingh54 ajsingh54 Jul 28, 2012 12:45 PM Flag

    If EU rescue Spain, ING's 50B ER become a very safe assets

    ING is trading at a discount due to its 50Billions Euro holding of Spain senior bonds and old Mortgage bonds, if EU solve Spain problem then ING could go back to $40+ easy.

    That meant not only safing ING's 50B Euro capital but it can also count on those income generated from those 50B Euro.

    As every one knows that time always heals the wounds.

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    • "ING could go back to $40+"

      Don't forget ING diluted from 2.1B shares in 2007 to 3.8B today since the price was $40+. So even at the same earnings and valuation metrics ING price would be only $20+.

      But, IF (big if) ING can ever return to a normal banking profitability of 1% on assets (Profit/Asset=1.0% as most US banks do today) again,
      just like ING was well capable to do in 2004-07, with a similar 3-4% dividend,

      then ING should make $12.5B profit/year,
      and at a P/E=11 valuation this adds up to MarketCap=$137.0B;
      which means ING is priced (137B/3.8B) at $37/share.

      This is a longterm, best-case target price;
      and to achive it again, ING needs a lot to do;
      like fire the current management and bring in quality guys,
      replace the Board of Directors,
      reorganize operations and cut loss centers,
      focus and motivate employees on profit and not on undeserved perks,
      etc.

      Its a long way to Tipperary:
      "But try to make it happen
      Try to fight it out
      Just stick around,
      You're down for the final count
      Get down
      Get down..."

 
ING
13.74+0.19(+1.40%)Jul 24 4:02 PMEDT

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