NatWest recently released its third-quarter financial results, revealing some key insights.
Pre-tax Profit
The U.K. bank reported an operating pretax profit of £1.33 billion ($1.62 billion) for the three months ending September 30th. While this falls slightly short of the expected £1.36 billion, it is still an improvement from the operating pretax profit of £1.09 billion during the same period last year.
Net Income
NatWest's third-quarter total income increased to £3.49 billion, although it fell short of the consensus estimate of £3.585 billion. Net interest income was £2.685 billion, below the expected £2.80 billion. In comparison, the total income for the same period last year was £3.23 billion, which included £2.64 billion in net interest income.
Key Highlights
Guidance
The bank revised its income guidance for the year, lowering it from £14.8 billion to £14.3 billion.
Net Interest Margin
NatWest's bank net interest margin for the quarter was 2.94%, which is below the expected 3.07% and lower than the 3.13% reported in the second quarter. The bank also adjusted its 2023 guidance for this metric to over 3%, compared to the previous expectation of around 3.15%.
Impairment
NatWest recorded impairment losses of £229 million, which is lower than the expected charge of £275 million according to consensus.
CET 1 Ratio
The lender's common equity Tier 1 ratio, a significant measure of balance-sheet strength, was 13.5% at the end of the period. While this is consistent with the previous quarter, it is slightly below consensus' expectation of 13.8%. NatWest aims to maintain a CET1 ratio between 13% and 14% in its 2023 and mid-term guidance.
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