NatWest Group’s latest results

4 minute read

Ahead of the expected retail share offer, Julien LaFargue, Chief Markets Strategist, shares his views on the day-to-day workings and financial health of the NatWest Group.

While the UK waits for the expected NatWest retail share offer to be confirmed by the government, we thought it would be helpful to share some insights into how the NatWest Group operates today.

The bank has just released its latest set of financial results, which has provided the public with an insight into how it makes a profit, where it needs to be more efficient, and what its strategy is for the future.

Refresh: What is the NatWest Group?

  • The NatWest Group is one of the UK’s largest banks, part-owned by the government following its bailout of the bank during the financial crisis in 2008 and 2009.
  • It offers retail banking (on the high street), commercial banking (to companies and institutions) and private banking. It is headquartered in London.
  • Within the NatWest Group, there are brand names that you may recognise including Coutts, Royal Bank of Scotland, Lombard, and more.
  • The current boss of the bank is Paul Thwaite. He took on the role in July 2023, following the departure of Dame Alison Rose.

Update: Latest financial results

On the 26 April 2024, the NatWest Group released its latest set of financial results.

In a nutshell, this is what the results told us:

  • In the first three months of 2024, the NatWest Group made an operating profit of £1.3 billion. This was broadly in line with what analysts were expecting.
  • NatWest Group reported a return on tangible equity (known as RoTE) of 14.2%. This figure is above it’s target of 12% indicating that the business is currently profitable and doing relatively well.
  • The bank’s capital ratio – or in simplistic terms, the ‘buffer’ it must maintain to absorb any nasty shocks like a financial crisis – remains strong.
  • There are, however, some challenges:
    • While the operating profit was good (see above), it was 27% lower than at the same time last year. The bank is not immune to the financial strain experienced by its customers during the cost-of-living crisis.
    • NatWest is facing competition in the mortgage space, with borrowers shopping around for better interest rates on offer.
    • Meanwhile, its operating costs rose by £64million. Investors typically like it when these costs fall.
    • And it had to set aside £93 million to cover what it calls ‘bad loans’ – the type of loan that isn’t paid back because the borrower can’t make a payment.

There is of course a lot more information that comes out whenever a large company releases its results. For the purposes of this short article, we’ve just highlighted a few of the big numbers and themes.

Broadly speaking, the NatWest Group is meeting its targets and is performing in line with expectations. This may change but for now, the bank appears to have steadied the ship since the high-profile departure of its previous boss.

A significant focus for the government, and the bank’s leadership team, is now on reducing the NatWest Group’s reliance on state support (via the expected retail share offer).

Next steps

While we wait for confirmation and further details of how a retail share offer will work, we will update you on any key developments.

These insights are designed to help you better understand a retail share offer that is anticipated to generate a lot of interest across the UK in the coming months.

Read what we know so far on the NatWest retail share offer including expected timelines and likely next steps.

Please note: The information provided here is not an endorsement of NatWest as a stock, nor is it a recommendation to invest in this particular share offer when it opens.

Investments can fall as well as rise so you might not get back what you invest. If you’re unsure which investments are right for you please seek independent advice. Tax rules can change and depend on your circumstances.

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