ING's third quarter showed a bank still earning well but with the growth rate easing: diluted EPS of €0.65 rose 7.5% on the year, revenue of €6.227B grew 5.6%. Retail deposit growth offset seasonal outflows, a higher liability margin reflected disciplined pricing and repricing of the replicating portfolio, and hedge ineffectiveness from rate volatility weighed on all other income. SE fair value of €35 is 22.7% above the price of €28.72, though Quality and Moat each earn only one star.
Management guided commercial net interest income to the upper end of EUR 16.8 billion to EUR 17 billion for 2026, with the liability margin near 110 basis points and the lending margin broadly stable at 123. Fee income should reach EUR 5 billion, and all other income EUR 2.5 billion to EUR 2.7 billion. Wholesale Banking becomes Corporate and Institutional Banking on 1 March, and a Capital Markets Day with 2030 targets follows on 14 June 2027. The CEO said ING is "well ahead of our financial targets." Risks raised: loan growth, especially mortgages, and strong deposit competition.
Consensus expects FY2026 EPS growth of +17.6%, against revenue growth of -4.4%, then +20.2% EPS growth in FY2027. That sits alongside guidance pointing to firmer net interest income, though a falling revenue line limits how much of the earnings growth comes from the top. Our own FY2026 EPS projection of €2.92 is 17% above the €2.49 consensus, with an 80% interval of plus or minus 23%. EPS beat the estimate in 5 of the last 8 quarters, but the latest quarter missed by 4.4%.
The efficiency ratio moved from 35.6% in FY2022 to 46.7% in FY2025 (+11.1pp, up, worse), so more of each euro of income now goes to costs. Net margin moved from 39.4% to 32.3% (-7.1pp, down, worse). Return on equity moved from 22.3% to 15.6% (-6.7pp, down, worse), yet the current 17.6% is still above its 5-year median of 11.2% and ranks at the 97th percentile among size-matched peers. Return on assets of 0.7% and the shrinking share count's limited effect on per-share growth hold Quality back.
The stock is priced richly against its own past: P/TBV of 1.70x is 98% above its 10Y own median of 0.86x, and P/B of 1.64x is 95% above its median of 0.84x. SE fair value of €35 is 22.7% above the price, with high confidence. The analyst target of €36 is 24.2% above the price. For the price to hold, returns must stay near today's levels, since the multiple already assumes it. A further rise in the efficiency ratio from 46.0% would show otherwise.
The SE Score is 1 of 3. Quality earns one star because return on equity of 13% on a three-year median clears the 6.7% cost of equity, while return on assets of 0.7% and thin equity to assets of 4.3% add little. Moat earns one star: ROE topped 12% in only 2 of 10 years, though book value per share grew in 6 of 9. Value earns three stars, with fair value above the price. Price left the business tier as it was, because a Moat of 1 cannot climb past one star on price.
ING Groep N.V. provides banking products and services in the Netherlands, Belgium, Germany, the rest of Europe and internationally to individual customers, corporate clients and financial institutions. It offers current and savings accounts, business, SME and consumer loans, debt and equity market solutions, payments, cash management, trade and corporate finance, treasury, investment, insurance and digital banking services.