NatWest Lifts Guidance After Quarterly Beat

By Elena Vardon

NatWest raised its guidance after its second-quarter top line benefited from a higher-for-longer interest rate environment and lower impairments.

The U.K. bank now expects to make 14.0 billion pounds ($18.0 billion) in total income excluding notable items for the year, up from its previously guided GBP13.0 billion to GBP13.5 billion range. Analysts currently expect a GBP13.81 billion result, according to a company-compiled consensus.

The lender--in which the U.K. government owns an around 20% stake--on Friday said it generated GBP3.66 billion in total income for the three months ended June 30, better than consensus' estimated GBP3.41 billion.

It posted a net interest margin--which reflects how the Bank of England's expected interest-rate cuts affect the income it earns on its loans--of 2.10% for the period, ahead of expectations of 2.01% and the first quarter's 2.05%, on improved deposit margins.

NatWest also upgraded its outlook in terms of return on tangible equity for the year to above 14% from around 12%. Its second-quarter ratio was 18.5%, largely beating consensus' 13.4% view.

Pretax profit for the quarter--at GBP1.70 billion--also surpassed expectations of a GBP1.26 billion result.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

July 26, 2024 02:38 ET (06:38 GMT)

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