Business Strategy and Outlook| Johann Scholtz, CFA |
Low--currently negative--interest rates and the impact on ING's earnings is likely to weigh on the minds of investors for the foreseeable future. While understandable, as net interest income contributed 77% of its revenue for 2020, this is unfortunate; ING is more than merely a play on European interest rates. We believe ING's strong deposit franchises in its core markets is its greatest competitive advantage. This is completely obscured in the current low interest-rate environment. In our opinion ING has surplus capital, which could boost shareholder returns and a more focused geographical strategy could drive a rerating.