ING Groep (ING) has commenced a share buyback program to repurchase up to 10% of its issued share capital worth €1.7 billion.
Shares of the Dutch multinational banking and financial institution that offers banking, insurance, and asset management services to individuals, small, and medium-sized enterprises have gained 105% over the past year. (See ING Groep stock charts on TipRanks)
The buyback program will begin on October 5, 2021, and is expected to close on May 5, 2022.
The share buyback program has been approved by the ECB after it lifted its recommendation to limit shareholder remuneration until 30 September 2021.
ING CEO Steven van Rijswijk commented, “ING aims to provide an attractive return to shareholders and this buyback will help optimize our capital structure.”
The company also said that its current Common Equity Tier 1 (CET1) ratio of 15.7% will not be impacted by the buybacks as it will be executed with capital reserved outside of regulatory capital.
Last month, UBS analyst Johan Ekblom increased the price target on ING from €12 to €12.50 while reiterating a Buy rating on the stock.
Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average ING Groep price target of $15.13 implies 4.4% upside potential to current levels.
ING scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.