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NatWest Results 16-Feb; Strategy and Credit Quality

FINANCIALS

NatWest (NWG LN) kicks off UK bank results season on 16-Feb; three things really interest us at this stage.


  • Strategic direction; the current CEO is interim (12m initial term) and was appointed in Jul-23. He was key to the last major strategic review (2019) and no changes have been indicated yet but, whomever ends as permanent CEO, we may see further focus and efficiency brought to the group.
  • The UK government still owns 35% of NatWest and has been selling down relatively consistently with little impact on the credit stack. We assume further sell-down without meaningful impact but that’s a longer-term game.
  • NatWest is light on investment banking (credit positive) and one of only two banks really focused on the UK domestic market (with Lloyds), indications of which were good from Santander UK results on 31-Jan. Outlook for revenues as rates fall, and credit quality will lead the UK results season.
NatWest’s CDS gapped out alongside a weak 3Q24 reporting season (lower margins, revenues and profitability) but has since tightened meaningfully and only sits ~15bp wide of the European average (see graphic).

Results are 0700 (London) with 0900 analysts’ call at: https://natwest-events.zoom.us/webinar/register/WN_zNqnf_GJQECnJZgPA4hGAA#/registration

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