16 February 2024
If you are covering NatWest Group’s full year results, please find a comment below from Will Howlett, financials analyst at Quilter Cheviot:
“NatWest Group reported a better-than-expected profit before tax for the full year 2023, thanks to lower loan loss provisions. The bank's guidance for 2024 was cautious, reflecting the uncertainty of the economic outlook and the impact of five anticipated rate cuts by the Bank of England. Base rate reductions also weigh on the return on tangible equity target of over 13% in 2026, which compares with the prior medium-term target of 14-16%. However, we think this remains a healthy level of profitability against the assumed base rate of 3%, particularly with the shares trading at 0.7x tangible book value. As such, we think the shares are discounted and there is no exposure to the FCA's probe into motor finance commissions, an overhang for some peers.”
