ING Groep N.V. ADRING

Morningstar Rating

Stock Research and Analysis

by Alan Rambaldini

Prior to the financial crisis of 2008, ING Groep was focused on divesting businesses where it lacked the scale and expertise to compete effectively and reallocating the capital to more favorable prospects. However, losses incurred from the credit crisis Read more

Bulls Say

The guarantees from the Dutch government have removed much of the balance sheet risk facing ING. The firm could be in solid shape to benefit from an eventual economic recovery.

Divestiture of the insurance operations will allow ING to highlight its more profitable banking operations.

ING has successfully renegotiated more favorable terms for part of its debt to the Dutch government and may be able to do more in the future. Read more

Bears Say

One billion securities issued to the Dutch government in exchange for EUR 10 billion will either have to be repaid with a 50% premium or converted to common shares before ING can pay dividends to common shareholders without paying an 8.5% interest rate on the securities.

Guarantees from the Dutch government on the value of the firm's portfolio of Alt-A RMBS came at the price of ING promising to make EUR 25 billion available for loans in the Netherlands.

Potential buyers who realize that ING must divest its insurance business will be able to drive a hard bargain during negotiations. Read more

Strategy

The effects of the financial crisis forced ING to abandon its strategy of investing in high-growth areas like retirement services and developing insurance markets. Instead, the firm will focus on deleveraging Read more

Management

Current CEO Jan Hommen abandoned his role as chairman to take over the CEO spot this year; the Dutch government ousted the former CEO in response to the firm's large investment losses and subsequent bailout. We think ING has taken several steps to improve Read more

Profile

Diversified financial services provider ING Group serves millions of individual and corporate clients worldwide. Company profits are currently split evenly between insurance Read more

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