NatWest: Medium-Term Earnings Set To Remain Elevated

Mark Dockray
1.9K Followers
(8min)

Summary

  • NatWest reported a reasonable set of fourth quarter figures, with revenue and net income both beating consensus, while operating costs were a little softer than expected.
  • The outlook for the bank's earnings has been improving, supported by 'higher for longer' interest rates and the knock-on implication for structural hedge income.
  • These shares now trade for ~1.3x tangible book value. Although this looks rich, medium-term earnings can support a premium multiple, while capital return potential also remains compelling.

A high street branch of Natwest bank, with people and customers walking past.

Wirestock/iStock Editorial via Getty Images

NatWest Group (NYSE:NWG) produced another set of reasonable figures covering its fourth quarter. While financials were arguably a little so-so versus consensus, the market has been playing catch-up here recently, with the outlook for the bank's

This article was written by

1.9K Followers
I like to take a long term, buy-and-hold approach to investing, with a bias toward stocks that can sustainably post high quality earnings. Mostly found in the dividend and income section. Blog about various US/Canadian stocks at 'The Compound Investor', and predominantly UK names on 'The UK Income Investor'.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of NWG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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