NatWest investors await full-year results as bank looks to shrug off debanking

12 February 2024 , 10:24

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NatWest will unveil its fourth quarter earnings and full-year financial results on Friday (Image: 2024 PA Media, All Rights Reserved)

NatWest, which also owns Royal Bank of Scotland, Ulster Bank and Coutts, is set to reveal its financial results for the last quarter and the full year on Friday.

The bank is predicted to report a pre-tax profit of £6 billion for the year, with an income totalling £14.6 billion, according to analysts' consensus from November. Investors were rattled in October when the bank lowered its forecast net interest margin (NIM) for the year, causing its share price to drop.

The NIM shows the difference between what the bank pays out to savers and what it receives from interest on loans, indicating the bank's overall health and profitability. Peter Rothwell, the head of banking for KPMG, said there is “clearly a big market focus” on margins and investors will be looking for clarity on the outlook.

"There will be a focus on to what extent is the consumer and small business proving resilient, and how long can they stay resilient for," he added. This is amid rising concerns over provisions for bad loans and possible signs that more borrowers are struggling.

NatWest is aiming to put an end to the debanking scandal that rattled the bank last year. The ex-leader of Ukip, Nigel Farage, criticised Coutts, a bank owned by the group, accusing them of deciding to close his account due to disagreement with his political views.

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This ignited a wider debate concerning freedom of speech and the ability UK banks have to strip people of their banking services. Consequently, NatWest's and Coutts' bosses, Dame Alison Rose and Peter Flavel, resigned. Dame Alison was replaced temporarily by Paul Thwaite. It's anticipated that the bank will soon announce a permanent replacement.

At the same time, NatWest is preparing to sell its shares to everyday investors potentially as early as this summer. Chancellor Jeremy Hunt disclosed this retail offer during his autumn statement last year, marking another stage in the government's plan to fully dispose of its stake in the bank.

Lawrence Matheson