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Why ING could deliver a 25 percent return
ING missed profit expectations. Underlying net profit for the third-quarter of 2013 came in at USD1.2 billion. But the CEO says the results are "solid" and its restructuring is on track.
The financial-services company was rescued by the Dutch government in 2009 with a EUR 10 billion bailout and Saxo Bank’s Peter Garnry says the company has really started to turn things around.
He explains that ING’s IPO for its US insurance business has “increased a lot of shareholder value”, and in addition, the company has managed to cut a lot of costs.
ING’s shares are up around 34 percent so far this year and Peter thinks they will continue to climb. He says: “In the last year, we have seen a phenomenal share performance, and it’s due to this ongoing turnaround. We’re beginning to see that ING is becoming a more buyable company.”
In fact, he believes ING should be trading 25 percent higher from current levels, and the two short term catalysts “will be the sell-off of their life insurance business in Japan, and the IPO”.
ING announced last month that it expects to complete the split of the group, with an IPO of its European insurance business in 2014, now to be rebranded NN.
ING agreed with European regulators to divest at least 25 percent of the US unit by the end of 2013, more than half by the end of 2014 and the rest by the end of 2016.
It has until the end of 2018 to complete the sale of its global insurance operations.
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