NatWest Group PLC (LSE:NWG) is set to update investors on its full-year results tomorrow, with analysts predicting fourth-quarter underlying profits of £1.36bln.
Full-year profits are expected to reach £4.95bln, amid expectations of increased net interest income and potential for increased capital returns, City analysts believe.
Despite the positive outlook, one rival, Barclays, recently downgraded NatWest to an 'equal weight' rating and noted concerns around the risks of deposit outflows.
NatWest remains in favour at Goldman Sachs (NYSE:GS), nonetheless, which gave the bank a 'buy' rating ahead of the results.
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Goldman Sachs (NYSE:GS) believes that NatWest's net interest income will increase to £3bn in the fourth quarter, up from £2.6bn in the previous three months, and could take the annualised rate to £12bn, significantly boosting the bank's bottom line.
Analysts predict that the sharp step-up in profits will be driven by rising interest rates, with much of the profit increase seen in the second half of the year and particularly in the fourth quarter.
Going forward, investors will be closely watching for indications of the bank's future, particularly around capital returns (dividends, buybacks) and potential M&A activity.
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