Analyst Note| Johann Scholtz, CFA |
ING confirmed on Oct. 1 that it will repurchase EUR 1.7 billion of its own shares starting Oct. 5. The buyback is intended as payment for the 2019 dividend that ING was unable to pay because of the regulatory ban on shareholder distributions. ING previously guided that it would honour the 2019 dividend, but at the time it was uncertain if the company would pay it in cash or repurchase shares. ING reserved the dividend outside of capital already and its payment will have no impact on the common equity Tier 1 ratio. ING is trading at a 15% discount to our EUR 14 fair value estimate, so we agree that share repurchases will be value-accretive.