Analyst Note| Johann Scholtz, CFA |
Narrow-moat ING reported a net attributable profit of EUR 1.4 billion for the third quarter of 2021, a material recovery from the EUR 788 million profit it reported for the third quarter of 2020 and only slightly below the EUR 1.5 billion it reported in the second quarter of 2020. The trends of the previous quarter continued. Credit quality remains strong, fee income benefited from no COVID-19 restrictions, and interest margins are stabilising. As we have consistently highlighted, ING has substantial excess capital. It indicated that it would update the market about its plans to return the spare cash to shareholders after its first-quarter 2022 results announcement in May next year. A sizable capital return could be a catalyst for a further re-rating of the share. We maintain our EUR 14 per share fair value estimate.