NatWest Guides For Lower Income This Year After Fourth Quarter Beats Expectations

By Elena Vardon

NatWest guided for income to decline this year after posting fourth-quarter profit that beat expectations.

The British bank expects to make between 13.0 billion and 13.5 billion pounds ($16.38 billion-$17.01 billion) in total income excluding notable items for 2024, as the benefit from higher interest rates--which boosted its top line in 2023 to GBP14.75 billion--taper off given the expected cuts later in the year.

It also guided for a return on tangible equity of around 12% for the year--compared with 17.8% for 2023--and for costs to be broadly stable compared with 2023's GBP8.0 billion in operating expenses.

For the three months ended Dec. 31, the group posted a pretax profit of GBP1.26 billion compared with GBP1.43 billion a year prior, beating estimates of GBP1.02 billion taken from a company-compiled consensus.

Fourth-quarter total income rose to GBP3.54 billion from GBP3.71 billion, ahead of the GBP3.38 billion forecast by analysts. Net interest income slipped compared with the previous quarter to GBP2.64 billion against consensus' expected GBP2.59 billion.

The lender--in which the U.K. government has a 35% stake--added that it would launch an on-market GBP300 million share buyback in 2024. It proposed a final dividend of 11.5 pence a share, bringing the full-year payout to 17.0 pence.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

February 16, 2024 02:54 ET (07:54 GMT)

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