ING Launches €1.65 Billion Buyback but Flags 400 Job Cuts

what happened

Dutch lender ING Groep has launched a share buyback worth 1.65 billion euros, or about $1.84 billion, while also planning to restructure its wholesale banking division and cut around 400 jobs. The buyback is larger than the 1.25 billion-euro program analysts had expected. ING said a further 250 million euros will be paid to shareholders in cash in January.

According to ING, the changes take effect in March, and the unit will be renamed corporate and institutional banking. The bank reported third-quarter net profit of 1.85 billion euros, up from 1.79 billion a year earlier but below the consensus of 1.97 billion. Total income rose 5.6% to 6.23 billion euros, yet missed the 6.31 billion estimate, as ING blamed lower other income on higher interest rate volatility.

why it matters

The buyback supports ING's shares and signals that the bank is comfortable returning capital, with a CET1 ratio of 13.3%. The profit and revenue miss, along with the cuts made amid rate volatility, shows how dependent European bank earnings remain on market conditions.

market impact

European banks: the ING buyback and job cuts support the shares, but the profit miss weighs on them

• ↔ING shares mixed — buyback supports the stock, while the profit miss and job cuts weigh on it

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