NatWest Projects Lower Income in 2024 Despite Strong Q4 Results

NatWest, the prominent British banking institution, has indicated a projected decline in its income for the year 2024, despite reporting a fourth-quarter profit that surpassed market expectations. The bank's top line was significantly enhanced by favorable interest rates in 2023, but as these rates are anticipated to be reduced later in the current year, NatWest forecasts a decrease in income. The projection is set between 13.0 billion and 13.5 billion pounds, excluding significant items, a slight dip from the 14.75 billion pounds reported in 2023.

Managing Expectations

The bank, partially owned by the UK government, predicts a return on tangible equity of around 12% for 2024, which is a noticeable drop from the impressive 17.8% achieved in 2023. Moreover, NatWest expects to maintain its costs relatively steady with the previous year's operating expenses amounting to 8.0 billion pounds. Quarterly figures continued to impress with a posted pretax profit of 1.26 billion pounds for the final quarter of 2023, exceeding the predicted 1.02 billion pounds.

Quarterly Financial Highlights

NatWest's Q4 total income reached 3.54 billion pounds, ahead of analysts' expectations, contrasting with the previous year's figure of 3.71 billion pounds. Its net interest income, nonetheless, saw a slight decline from the previous quarter, standing at 2.64 billion pounds—still ahead of the forecasted 2.59 billion pounds. In a strategic move to bolster investor confidence, NatWest announced an on-market share buyback program valued at 300 million pounds planned for 2024. In addition, it proposed a handsome final dividend of 11.5 pence per share, culminating a full-year payout of 17.0 pence per share.

NatWest, Income, Banking