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ING Groep Rises on 3rd-Quarter Results

- By Alberto Abaterusso

ING Groep N.V. (ING) soared 7.96% to $12.75 per share on the New York Stock Exchange on Thursday after posting financial results for the third quarter.

The company reported strong growth in both primary customers and core lending.

The Dutch bank saw its primary customers base increase 1.7% to 12.2 million, closing the third quarter with a total retail customer base of 38 million.


Over the same period, well-diversified net core lending increased 6.8 billion euros ($7.7 billion) and the total net inflow from customer deposits was 3.4 billion euros.

The net interest income of 3.47 billion euros increased 3.3% from the second quarter of 2018 and 5.5% from the prior-year quarter. The figure doesn't include financial markets and the effect of having ended some hedge relationships.

The total net interest margin was 1.52%, up silightly from 1.51% in the previous quarter and down from 1.57% in the year-ago quarter.

The income statement also shows underlying operating expenses were 2.22 billion euros, down from 2.25 billion in the second quarter but up from 2.2 billion euros in the prior-year quarter.

The Dutch international bank reported pre-tax income of 2.124 million euros, up from 2.02 billion euros in the second quarter and from 2 billion euros a year ago.

As a result of a 775 million euros settlement with Dutch authorities, the net income was about 776 million euros. ING Groep continues to grow, showing resilient margins and a low level of costs for managing risks and incurring losses.

The bank also reported that the fully loaded Common Equity Tier 1 ratio was strong at 14% and the trailing 12-month average underlying return on equity stood at 10.7% as of the third quarter.

The tier 1 common capital ratio is a measurement that compares the bank's core equity capital with its total risk-weighted assets. The ratio measures the financial strength of the bank.

ROE is calculated as net income on shareholders' equity, measuring the financial performance of the company.

The stock was slightly up in Friday trading at $12.84 per share. ING Groep has a market capitalization of $49.7 billion. The share price declined 30% for the 52 weeks through Nov. 1 and is trading below the 200- and 100-day simple moving average lines, but is close to the 50-day SMA line. The share price at close on Thursday was 11.1% above the 52-week low of $11.47 and 61.4% below the 52-week high of $20.58.

The stock has a price-earnings ratio of 8.62 versus an industry median of 14.76 and a price-sales ratio of 2.37 compared to an industry median of 3.41.

The forward dividend yield is 5.54%.

Disclosure: I have no positions in any securities mentioned in this article.

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This article first appeared on GuruFocus.