By Elena Vardon
NatWest reported its third-quarter results on Friday. Here is what you need to know:
PRETAX PROFIT: The U.K. bank posted an operating pretax profit of 1.33 billion pounds ($1.62 billion) for the three months to Sept. 30, short of the expected GBP1.36 billion taken from company-compiled consensus based on 13 analyst estimates. This compares with an operating pretax profit of GBP1.09 billion for the year-earlier period.
NET INCOME: The lender’s third-quarter total income rose to GBP3.49 billion but missed consensus’ GBP3.585 billion. Net interest income was GBP2.685 billion, below the expected GBP2.80 billion. This compares with a total income of GBP3.23 billion for the same period a year earlier, which included GBP2.64 billion in net interest income.
WHAT WE WATCHED:
–GUIDANCE: The group lowered its income guidance for the year to GBP14.3 billion from GBP14.8 billion previously.
–NET INTEREST MARGIN: NatWest’s bank net interest margin–the difference between what lenders earn on loans and pay out on deposits–was 2.94% for the quarter, below expectations of 3.07%, and lower than the 3.13% posted in the second quarter. It lowered its 2023 guidance for the metric again and now sees this at more than 3%, from previous expectations of around 3.15%.
–IMPAIRMENT: The bank booked GBP229 million in impairment losses, lighter than the GBP275 million charge expected by consensus.
–CET 1 RATIO: The lender’s common equity Tier 1 ratio–a key measure of balance-sheet strength–was 13.5% at the end of the period, in line with the previous quarter but below consensus’ 13.8%. It continues to target a CET1 ratio between 13% and 14% in its 2023 and mid-term guidance.
Write to Elena Vardon at elena.vardon@wsj.com
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