NatWest, the U.K. bank, is set to unveil its second-quarter results on Friday. Here are the key details:
Operating Pretax Profit
Analysts predict that NatWest will announce an operating pretax profit of £1.49 billion ($1.93 billion) for the three months ending June 30. In comparison, the bank reported a pretax profit of £1.40 billion for the same period last year.
Net Profit
The anticipated net profit attributable to ordinary shareholders is expected to be £1.00 billion, according to consensus estimates. This figure is slightly lower than the £1.05 billion recorded in the corresponding quarter from the previous year.
Total Income
NatWest's total income for the second quarter is projected to reach £3.71 billion, based on consensus figures. Of this total, net interest income is estimated to contribute £2.90 billion. By comparison, during the same period last year, the bank reported a total income of £3.21 billion, including £2.31 billion in net interest income.
Key Metrics to Observe
- Net Interest Margin: Analysts anticipate a second-quarter net interest margin of 3.22%, slightly lower than the 3.27% recorded in the previous quarter.
- CET 1 Ratio: The common equity Tier 1 ratio, a critical measure of balance-sheet strength, is expected to decrease from 14.4% in the previous quarter to 13.8% at the end of this reporting period.
- Capital Returns: The consensus suggests that NatWest may declare an ordinary dividend of 5.7 pence per share and potentially initiate a £251 million on-market share buyback program. However, only a few analysts have included the buyback program in their models. Jefferies notes that a buyback program would be surprising, while Deutsche Bank expects further general buybacks this year, emphasizing the need to accumulate sufficient capital for the 2024 directed buyback.
- CEO Transition: Earlier this week, an internal incident involving the bank's CEO, Alison Rose, attracted significant media attention. As a result, Rose resigned from her position with immediate effect. This development may overshadow the second-quarter results, according to CMC Markets UK.
