NatWest Results Highlight Quiet Friday in Corporate Releases
On Friday, NatWest will unveil its full-year results, drawing attention on a notably quiet day for corporate updates. According to UBS, NatWest is expected to report a pre-tax profit (excluding litigation and conduct costs) of £1.75 billion and a Common Equity Tier 1 (CET1) ratio of 13.4%.
Key Financial Expectations from NatWest
Market analysts are particularly interested in NatWest’s new medium-term targets leading up to fiscal year 2028. UBS highlighted that these projections will provide insight into the sustainability of the bank’s premium revenue growth, especially in comparison to Lloyds Banking Group. Additionally, potential future mergers and acquisitions are also under scrutiny.
Capital Generation and Loan Losses
- NatWest is likely to reinforce its aim for a return on tangible equity (ROTE) of approximately 18% through the outlined plans.
- The bank is expected to align its CET1 target towards the lower end of the previous range of 13-14%.
- Management may also guide towards a normalization of loan losses compared to fiscal year 2025.
Bonus Announcement and Corporate Context
In a significant development, reports from Sky News indicate that NatWest will disclose bonuses nearing £500 million for the last fiscal year. This comes as the bank returned to full private ownership, 17 years following its taxpayer-funded rescue.
The anticipated bonus pool for 2025 is slightly above £490 million, reflecting a 10% increase from the prior year.
Broader Corporate Releases and Economic Indicators
On the same day, several companies across Europe, including Safran, CapGemini, and Norsk Hydro, are expected to release their financial results. In the United States, Moderna will also share its performance details.
Macro Economic Releases
- Eurozone unemployment figures.
- Preliminary GDP data for the eurozone.
- Trade balance statistics.
These releases are scheduled for 10:00 GMT, while the U.S. consumer price index for January will be published at 13:30 GMT.
According to Michael Hewson from MCH Market Insights, the December consumer price index remained steady at 2.7%. This figure presented itself following a previous 3% in September, prior to the U.S. government shutdown. This context provided the Federal Reserve with the rationale to reduce rates by 25 basis points just before Christmas.
Hewson added concerns regarding the recent slowdown in price pressures. Experiencing discounts leading up to Christmas may have contributed to this decline in pricing, thus making the forthcoming economic data of significant interest.
As Friday unfolds, attention will be keenly focused on NatWest’s results amidst a landscape of limited corporate releases.
