NatWest is set to release its third-quarter results on Friday, providing insights into the bank's performance. Here are the key details you should know:
Pretax Profit
The company-compiled consensus based on 13 analyst estimates predicts that NatWest will report an operating pretax profit of £1.36 billion ($1.64 billion) for the three months ending on September 30. This marks an increase from the operating pretax profit of £1.09 billion reported in the same period last year.
Net Income
Consensus estimates suggest that NatWest's total income for the third quarter will reach £3.585 billion, with a contribution of £2.80 billion from net interest income. This compares to a total income of £3.23 billion in the same period a year ago, which included £2.64 billion in net interest income. The bank aims to achieve £14.8 billion in income for the year, highlighting improved non-interest income as it adjusts its net interest margin guidance.
Key Observations
Net Interest Margin: Analysts predict that NatWest's bank net interest margin (NIM)—the difference between the interest earned on loans and the interest paid on deposits—for the third quarter will be 3.07%. This is a slight decrease from the second-quarter NIM of 3.13%. During its half-year results, NatWest revised its NIM guidance and now expects it to be below 3.20%, with a target around 3.15% for the year.
Impairment: It is anticipated that NatWest will record £275 million in impairment losses for the quarter, compared to £247 million in the third quarter of 2022 and £153 million in the second quarter of 2023.
CET 1 Ratio: The common equity Tier 1 (CET1) ratio, which measures the strength of a bank's balance sheet, is projected to be 13.8% at the end of the period, up from 13.5% in the previous quarter. NatWest's 2023 and mid-term guidance aims for a CET1 ratio between 13% and 14%.
Outlook: No updates on capital returns or comments regarding the 2024 outlook are expected at this stage. Consensus estimates do not include any buybacks or dividends for the quarter.
