NatWest Group PLC (LSE:NWG) followed Barclays PLC (LSE:BARC) on Thursday by failing to impress investors with better-than-expected full-year numbers.
Two explanations have been proffered: Profit-taking (shares in both banks enjoyed strong runs ahead of the numbers); and the outlook (falling interest rates, subdued growth).
Either way, it appears to take a lot to cheer the Square Mile or the northwest in the case of Gary Greenwood, an analyst at Liverpool-headquartered Shore Capital. "The shares have had a very strong run over the past year and into these results so we would expect a neutral to slightly positive reaction this morning," he said.
Earlier, NatWest posted a return on tangible equity of 17.5%, beating its own upgraded guidance, while total income, excluding one-off items, reached £14.6 billion, driven by strong deposit margins and lending growth.
Net profit rose 2.9% to £4.5 billion, with earnings per share up 12% at 53.5p. The bank announced a final dividend of 15.5p per share, bringing the annual payout to 21.5p, a 26% increase. In total, £4 billion was returned to shareholders via dividends and buybacks.
The high street bank expanded its customer base by 500,000, increased mortgage lending by £3.2 billion, and grew commercial lending by £10 billion. Deposits rose £12.2 billion to £431.3 billion.
Despite solid growth, the bank remains cautious about 2025, forecasting income of £15.2-£15.7 billion and a return on tangible equity of 15-16%.