14 February 2025
If you are covering NatWest’s latest financial results, please see the following comment from Will Howlett, financials analyst at Quilter Cheviot:
"NatWest has delivered a strong set of fourth-quarter results, comfortably beating expectations and showing that it remains highly profitable despite a shifting interest rate environment. Its return on equity remains impressive at 19% for the quarter and 17.5% for the full year, and the bank has raised its long-term profitability targets, suggesting confidence in its future performance.
"A key positive is that pre-tax profit has jumped by nearly 20% compared to last year on higher net interest income benefiting from the structural hedge and lower loan losses. The bank’s capital position has dipped slightly, partly due to capital return, but remains well within its target range. There’s no new buyback plan announced today, but NatWest is rewarding investors with a final dividend of 15.5p, pushing its total payout for the year up by over a quarter.
"Looking ahead, NatWest has set ambitious targets, expecting solid profitability through to 2027, despite the likelihood of lower interest rates. The bank’s shares now trade at a premium compared to rivals like Barclays and Standard Chartered, reflecting the market’s confidence in its outlook. However, with interest rates expected to ease, the key challenge will be maintaining strong profits as net interest income, starts to normalise which is its biggest source of earnings."
