ING Groep NV, a Netherlands-based company focused on providing its customers with financial services, announced that it is considering selling shares in its European insurance division and plans to resume paying dividends in 2015.
ING Groep NV made an official statement today, revealing that the dividend will be paid after the company fully repays a government bailout by May 2015 at the latest. The dividend payout ratio, which is going to be set as a target is estimated to at least 40%. If this happens, it would be the first dividend payment made by ING Groep after a five-year pause.
The company explained that one of its main targets is to increase lending by 4% on an annual basis in the period until 2017. ING Groep NV is also becoming more focused on raising its interest margin from 150 to 155 basis points and reach a cost-income ratio amounting to between 50% to 53%.
The company underwent through serious difficulties during the financial crisis started in 2008 and needed government support in order to continue functioning. The financial help it received by the country in 2008 amounted to 10 billion euros (13.8 billion dollars).
The current Chief Executive Officer of ING – Mr. Ralph Hamers, who took the position of CEO in October 2013, said in the statement, which was cited by the Wall Street Journal: “Now that we are in the end stage of the restructuring, with our divestment program and repayment of the Dutch state almost complete, we are proud to be in a position to look ahead to the future.”
More than 12.5 billion euros in aid, interest and premiums have been paid by the company to the government. These figures include 1.23 billion euros paid today by ING. The remaining amount of money owed by the company is estimated to 1.03 billion euros. According to the companys agreement with EU regulators the remaining part of the debt is expected to be returned until May 2015.
ING Groep NV rose by 2.33% to 10.23 euros by 8:29 GMT in Amsterdam, marking a one-year change of +84.76%. The company is valued at 38.40 billion euros. The 26 analysts offering 12 month price targets for ING Groep NV have a median target of 11.55 euros, with a high estimate of 14.00 euros and a low estimate of 9.00 euros. The median estimate represents a 15.53% increase from the previous close of 10.00 euros.
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