ING shares retreat on 2023 outlook even as profit beats

ING Groep NV (INGA) on Thursday posted higher-than-anticipated quarterly net profit, but the group’s shares plummeted on disappointing 2023 guidance.

ING’s net profit came in at EUR 1.09 billion in the fourth quarter, while exceeding market consensus of EUR 1.03 billion, and increased from EUR 945 million in the year-ago period.

Still, ING’s projection for 10% growth in 2023 income and for an improvement in its cost to income ratio to 55% from 60% last year fell short of market expectations.

ING’s Chief Executive Steven van Rijswijk said the group’s margins should benefit from higher interest rates this year. However, the clients’ appetite to borrow and the group’s appetite to lend are not strong given current macroeconomic conditions.

ING’s core lending expanded EUR 3.1 billion during the fourth quarter, compared with EUR 13.4 billion a year ago.

“With the current circumstances we want to focus on existing clients, so don’t take on too much risk,” ING’s van Rijswijk was quoted as saying by Reuters.

“Once the economic cycle improves again, we expect a bit of flatlining in terms of GDP growth in the eurozone for the next 12 months, they will continue to expand.”

ING’s loan loss provisions dropped 22% year-on-year to EUR 269 million in the latest quarter.

The shares of ING Groep NV were last losing 5.20% (EUR 0.70) to trade at EUR 12.70 in Amsterdam on Thursday.

The financial group’s total market cap now stands at EUR 46.15 billion.