During the October 5 lightning round of Mad Money, a caller asked whether ING Groep N.V. (NYSE:ING) had “run out of gas.” Jim Cramer responded:
No, no, ING is good. I think ING is fine. People are very worried about Europe right now because of France. I think ING is good. I’m going to make it a twofer. I know there’s a snap election in Spain, but I happen to like Banco Santander very much, too. I think you’re in good shape.
Cramer’s confidence in Santander predates these results. In his June assessment of the stock, he also identified the price at which he would encourage investors to buy after its strong run.
Customer Activity Supports Higher Profits
ING Groep N.V. reported second-quarter net income of approximately €1.95 billion, up 16% year-over-year. Fee income increased 14% to approximately €1.28 billion, while net core lending and deposit growth reached €15.2 billion and €15.9 billion, respectively. Management raised its return-on-tangible-equity targets to above 15% for 2026 and above 16% for 2027. ING’s fee-growth ambitions extend beyond higher customer activity. Its earlier inclusion among profitable value stocks explored a change in how the bank charges customers that could shape its future revenue.
Banco Santander, S.A. (NYSE:SAN) reported first-half core profit of approximately €7.3 billion, up 15%. Revenue increased 6% to approximately €30.8 billion, supported by higher interest and fee income. Reported attributable profit was higher, at approximately €8.97 billion, but included a substantial gain from selling its Polish banking business. The core figure provides a cleaner comparison with operating performance. The company also announced a 10% increase in its interim cash dividend to €0.127 per share, payable on November 2, with an ex-dividend date of October 29.
Similar Earnings Multiples Mask Different Risks
ING Groep N.V. trades at approximately 11.6x forward earnings, compared with 10.9x for Banco Santander, S.A.. The operating risks also differ. ING’s wholesale banking risk costs increased to €142 million in the second quarter from €89 million a year earlier. Management attributed the charges partly to provisions on a limited number of impaired loans and a weaker economic outlook. Its common equity Tier 1 capital ratio stood at 13.1%. Interest rates add another complication to ING’s outlook. Earlier coverage of European banks favored by hedge funds explained why management saw a potential offset to the lending benefits of higher rates.
Santander’s first-half loan-loss provisions increased 9%, mainly because of conditions in Argentina, although its nonperforming-loan ratio improved to 2.93%. The bank also recorded €250 million in TSB integration restructuring costs. Its expansion offers additional customers and deposits, but comes with expenses and credit exposure across several markets. Cramer’s support for Santander also has an acquisition angle. His earlier comments on the bank’s planned Webster Financial purchase explained why he saw an opportunity that other banks were passing up.
Institutional Positions Change Little
Insider Monkey’s data showed 23 hedge funds holding ING Groep N.V. in both the first and second quarters. Banco Santander, S.A. had 24 holders in the second quarter, down from 25. Mid-September figures show short interest of approximately 0.11% of float for ING and roughly 0.3% for Santander. These U.S.-listing figures do not capture all positioning in the banks’ European shares. Fund ownership captures only part of ING’s shareholder story. Its entry among European stocks that beat earnings estimates examined a separate capital-return decision along with its first-quarter performance.
Both banks entered the second half with higher core earnings and growing customer activity, giving some support to Cramer’s confidence. Santander trades at a slightly lower forward earnings multiple, but the gap is small. For both banks, keeping loan losses under control while turning customer growth into sustained profits will matter more than that modest valuation difference.
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