ING Group N.V. announces €1.5 billion share buyback programme to reduce share capital, with an expected positive impact on CET1 ratio
Buybacks
May 11, 2023
May 11, 2023
ING Group N.V., a global financial institution, has announced a share buyback programme under which it plans to repurchase ordinary shares for a maximum total amount of €1.5 billion. The share buyback programme will commence on May 12, 2023, and will end no later than October 18, 2023. This article discusses the purpose of the share buyback programme and its impact on ING Group's CET1 ratio.
The purpose of the share buyback programme is to reduce the share capital of ING. The move is a next step in converging the institution's CET1 ratio towards its target of around 12.5% by 2025, as announced during its Investor Update in June 2022. The CET1 ratio is a measure of a bank's financial strength and is the core capital held by the bank to absorb losses.
At the end of the first quarter of 2023, ING Group's CET1 ratio was 14.8%, which is well above the prevailing CET1 ratio requirement of 10.73%. The buyback programme will have an impact of approximately 46 basis points (bps) on ING Group's CET1 ratio. This reduction in the CET1 ratio is due to the decrease in ING Group's share capital resulting from the share buyback programme.
The European Central Bank (ECB) has approved the programme, which will be executed in compliance with the Market Abuse Regulation and within the limitations of the existing authority to acquire a maximum of 10% of the issued shares as granted by the general meeting of shareholders on April 24, 2023. ING Group has entered into a non-discretionary arrangement with a financial intermediary to conduct the buyback.
Members of LevelFields received the alert of this event on May 11, 5:25 AM ET
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