NatWest Group, the U.K. bank in which the government holds a 38.69% stake, has announced its second-quarter results for 2023. The bank exceeded expectations by posting a pretax profit of £1.77 billion ($2.27 billion) for the three months ended June 30. This figure represents an increase from the £1.40 billion reported in the second quarter of 2022 and surpasses the consensus estimate of £1.49 billion compiled by the company.
Total income for NatWest Group rose to £3.85 billion, beating analyst forecasts of £3.71 billion. However, net interest income fell slightly short of expectations, coming in at £2.82 billion compared to a consensus estimate of £2.90 billion. The bank's net interest margin for the second quarter was 3.13%, lower than the anticipated 3.22%.
In light of its performance, NatWest Group has revised its net interest margin guidance for 2023. The bank now expects its banking net interest margin to be less than 3.20% for the year, down from the previous estimate of around 3.20%. The current margin is approximately 3.15%. It is important to note that the bank stands by its other targets.
Additionally, the board announced an interim dividend of 5.5 pence per share, falling short of the expected payout of 5.7 pence. However, NatWest Group plans to launch a £500 million on-market share buyback program in the second half of the year, surpassing expectations of a £251 million program.
These results demonstrate NatWest Group's strong performance, even in the face of challenging market conditions. As the bank continues to focus on its goals, investors will be closely watching its progress in the coming months.