NatWest Group PLC (LSE:NWG) raised its income forecast for 2024 after hitting its financial targets in the first half of the year.
The lender now expects full-year income to come to £14 billion, a notable bump from previous forecasts of between £13 billion and £13.5 billion.
It came as NatWest delivered an upbeat first-half financial update that surpassed market expectations.
Total income in the period came to £7.1 billion with an operating profit of £3 billion. Though these results represented a year-on-year decline, they still managed to surpass forecasts.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, called them a “knockout set of results”.
“As with Lloyds yesterday, it's the quarter-on-quarter numbers that investors are paying attention to. Second-quarter results have pretty much beaten expectations on every key metric, from income to margins.
“It's also good to see full-year guidance on net interest income finally get the upgrade investors had been hoping to see, and now supports the numbers analysts had been pencilling in.
“That's positive news and helps underpin the stock price which has been on a heater this year.”
NatWest announced total shareholder returns of £1.7 billion for the first half of 2024. This includes an interim dividend of 6p per share, reflecting a 9% increase from the previous year's dividend.
NatWest has also agreed to purchase challenger lender Metro Bank plc’s £2.5 billion portfolio of UK residential mortgages.
The deal will bring around 10,000 additional customers onto NatWest’s books and comes just a month after NatWest struck a similar £2.5 billion deal with Sainsbury’s Bank.
NatWest nabbed a 4.2% discount worth more than £100 million with the acquisition, since, according to Metro Bank, “the loans were originated in a lower rate environment”.