ING's Share Buyback Programme: Strategic Capital Reallocation and Its Impact on Earnings Per Share and CET1 Ratio

ING’s recent €2.0 billion share buyback program, completed in October 2024 and partially executed through August 2025, represents a calculated move to optimize capital efficiency while enhancing shareholder value. By repurchasing 125.8 million shares at an average price of €15.84, the bank has taken a decisive step to align its Common Equity Tier 1 (CET1) ratio with its revised target range of 12.8–13% [1]. This adjustment reflects both regulatory prudence and a proactive response to macroeconomic uncertainties, as highlighted by CEO Steven van Rijswijk during the Q1 2025 earnings call [2].

The buyback’s impact on ING’s capital structure is already evident. As of Q1 2025, the CET1 ratio stood at 13.6%, well above the regulatory minimum of 10.76% [1]. The program is projected to reduce this ratio by approximately 59 basis points, bringing it closer to the target range [1]. This strategic reduction is not merely a compliance exercise but a deliberate effort to balance capital conservation with shareholder returns. By lowering the CET1 ratio, ING is signaling confidence in its ability to maintain a robust capital buffer while deploying excess capital to reward investors.

From an earnings perspective, the buyback is a catalyst for EPS growth. ING’s Q2 2025 earnings report showed an EPS of $0.82, driven by a 12% year-over-year increase in fee income and strong net interest margins [3]. With the buyback program reducing the number of outstanding shares by 61.83% of its total value as of August 2025 [1], the EPS tailwind is expected to accelerate. The bank’s FY2025 guidance of $2.47 per share incorporates the benefits of these repurchases, which amplify earnings per share by shrinking the denominator in the EPS calculation [3].

ING’s approach to capital management is further reinforced by its proactive stance on global economic risks. The bank’s decision to raise its CET1 target range independently—without regulatory pressure—demonstrates a commitment to resilience [2]. This flexibility allows ING to adjust its capital strategy as macroeconomic conditions evolve, ensuring it remains agile in a volatile environment. The EBA stress test results, which confirmed ING’s resilient capital position [4], underscore the bank’s ability to withstand shocks while maintaining its dividend and buyback commitments.

For investors, the buyback program is a testament to ING’s disciplined capital allocation. By prioritizing shareholder returns without compromising its financial strength, the bank is creating a virtuous cycle: higher EPS, a more attractive valuation, and sustained investor confidence. The program’s execution—via a non-discretionary arrangement with a financial intermediary—also minimizes market volatility, ensuring a smooth and transparent process [1].

In conclusion, ING’s share buyback initiative is a masterclass in capital efficiency. It aligns with the bank’s strategic goals of maintaining a strong CET1 ratio, boosting EPS, and rewarding shareholders. As the financial landscape remains uncertain, ING’s balanced approach positions it as a model for prudent capital management in the banking sector.

Source:
[1] ING completes share-buyback programme, [https://www.ing.com/Newsroom/News/Press-releases/ING-completes-share-buyback-and-announces-new-programme-of-up-to-2.0-billion.htm]
[2] ING hikes 2025 capital target to brace for global uncertainty, [https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/5/ing-hikes-2025-capital-target-to-brace-for-global-uncertainty-88800985]
[3] Earnings call transcript: ING Group’s Q2 2025, [https://www.investing.com/news/transcripts/earnings-call-transcript-ing-groups-q2-2025-shows-robust-income-growth-93CH-4181902]
[4] EBA stress test confirms ING’s resilient capital position, [https://www.ing.com/Newsroom/News/Press-releases/EBA-stress-test-confirms-INGs-resilient-capital-position.htm]