NatWest 1Q24: Small Beat, Only Minor Upgrades

NatWest (A3, BBB+, A) 1Q24 results look very marginally better than expectations and inline with early indications from peers. There’s only a small estimate upgrade in here (if at all), we feel and, having outperformed YTD already, there are few reasons to see spreads gap tighter here.

• Key credit metrics: CET1 is in line with consensus (13.5%, up 10bp from Dec-23), loans losses beat expectations (at a nominal 10bp of loans, around half of estimates and 3bp lower than 4Q23) and non-performers are basically stable on Dec-23 figures.
• Wider view: revenues are 4% above expectations with net interest income a positive there, costs are about the same below estimates which drives a small (3%) pre-tax profit beat. Net interest margin (NIM) was actually up 3bp q/q
• Outlook: all the key financials targets appear unchanged on Dec-23 so there’s little indication of estimate moves here, we feel.

Conf call is 0900 (London time) at https://natwest-events.zoom.us/webinar/register/WN...