Profit ratio

NatWest Q2 Pretax Operating Profit, Total Revenue Exceeded Market Views – Earnings Review

By Sabela Ojea


NatWest Group PLC released its second quarter results on Friday. Here’s what we looked at:


OPERATING PROFIT BEFORE TAX: The UK bank posted a pre-tax operating profit of £1.40 billion ($1.70 billion), compared to £1.56 billion for the same period a year earlier early. Pre-tax operating profit was expected to fall to £940m, according to the consensus compiled by the lender for the period.


TOTAL REVENUE: The FTSE 100-listed lender’s total revenue rose to £3.21bn, from £2.66bn in the same period a year earlier, against expectations of £2.90bn sterling, taken from the lender’s compiled forecast for the period.


WHAT WE WATCHED:

— CET 1 RATIO: NatWest’s Tier 1 common equity ratio, a key measure of balance sheet strength, fell to 14.3% from 15.2% as of March 31. The rate was to be 15.1%, according to data compiled by the bank. forecasts.

–RoTE: Lender’s return on tangible equity increased to 15.2% in the second quarter from 11.3% in the first quarter.

–GUIDANCE: The bank said it expects to end 2022 with a CET 1 ratio of around 14% and end 2023 with a return on tangible equity between 14% and 16%. Natwest also expects to cut operating expenses by around 3% in 2022 after recording expenses of £1.83 billion for the second quarter and total costs of £3.65 billion for the first half. .

— SHARE PRICE: Investors reacted positively to NatWest’s second quarter results. Shares at 2:16 p.m. GMT were up 18.50 pence, or 8%, at 248.50 pence.


Write to Sabela Ojea at [email protected]; @sabelaojeaguix