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NatWest Group (NWG)
NYSE:NWG
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NatWest Group
(NYSE:NWG)
Rating:77Outperform
Price Target:―
NatWest Group (NWG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$55.86B
Dividend Yield3.81%
Average Volume (3M)4.63M
Price to Earnings (P/E)9.4
Beta (1Y)1.03
Revenue Growth18.85%
EPS Growth14.85%
CountryUS
Employees59,400
SectorFinancial
Sector Strength78
IndustryBanks - Diversified
Share Statistics
EPS (TTM)0.42
Shares Outstanding4,046,175,000
10 Day Avg. Volume4,584,005
30 Day Avg. Volume4,632,730
Financial Highlights & Ratios
PEG Ratio0.24
Price to Book (P/B)1.35
Price to Sales (P/S)0.00
P/FCF Ratio-13.79
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering0
NatWest Group Business Overview & Revenue Model
Company DescriptionNatWest Group plc, together with its subsidiaries, provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Commercial Banking, Private Banking, RBS International, and NatWest Markets segments. The Retail Banking segment offers a range of banking products and related financial services, such as current accounts, mortgages, personal unsecured lending, and personal deposits, as well as mobile and online banking services. The Commercial Banking segment offers banking and financing solutions to start-up, SME, commercial, corporate, and institutional customers. The Private Banking segment provides private banking and wealth management products for high-net-worth individuals and their business interests. The RBS International segment offers banking various products and services to institutional customers. It also operates in wholesale branches and fund depositary service businesses. The NatWest Markets segment provides services to corporate and institutional customers for the management of financial risks for achieving short-term and long-term sustainable financial goals. NatWest Group plc operates approximately 800 branches and 16,000 physical points of presence. The company was formerly known as The Royal Bank of Scotland Group plc and changed its name to NatWest Group plc in July 2020. NatWest Group plc was founded in 1727 and is headquartered in Edinburgh, the United Kingdom.
How the Company Makes MoneyNatWest Group generates revenue through a diversified range of financial products and services. The primary sources of income include interest income from loans and mortgages, fees from banking services such as account maintenance and transaction processing, and commissions from investment and insurance products. The retail banking segment offers personal loans, mortgages, credit cards, and savings accounts to individual customers. Commercial banking caters to small, medium, and large enterprises with services like business loans, asset financing, and cash management. Additionally, Private Banking provides wealth management and investment advisory services to high-net-worth individuals. The group also earns from its treasury operations and asset management activities. Strategic partnerships and collaborations with fintech companies and other financial institutions further enhance NatWest's service offerings and revenue potential.
NatWest Group Earnings Call Summary
Earnings Call Date:May 02, 2025
(Q1-2025)
| % Change Since: 10.02%|
Next Earnings Date:Jul 25, 2025
Earnings Call Sentiment Positive
NatWest Group reported a strong financial performance in Q1 2025, with significant income growth and a successful acquisition of Sainsbury's Bank. The company updated its 2025 guidance to reflect its strong start to the year. However, there are concerns about potential impacts from global economic uncertainty and regulatory environments. Despite these challenges, the overall sentiment remains positive due to the robust performance and strategic progress.Q1-2025 Updates
Positive Updates
Strong Financial Performance in Q1 2025
Income increased 15.8% year-on-year to GBP 4 billion, with operating profit of GBP 1.8 billion and attributable profit of GBP 1.3 billion. Earnings per share were up 48% to 15.5p, and tangible net asset value per share was 347p, up 15% year-on-year. Return on tangible equity was 18.5%.
Successful Sainsbury's Bank Transaction
The completion of the Sainsbury's Bank transaction added around 1 million new customer accounts, GBP 2.5 billion of unsecured lending, and GBP 2.7 billion of savings. This increased NatWest's credit card stock share to around 11%.
Updated 2025 Guidance
NatWest now expects 2025 income to be at the upper end of the GBP 15.2 billion to GBP 15.7 billion range, with a return on tangible equity at the upper end of the 15% to 16% range.
Growth in Customer Deposits and Lending
Customer deposits increased by 0.5% to GBP 433 billion, while customer lending grew by 0.9% to GBP 375 billion.
Strong Capital Position
Common equity Tier 1 ratio stood at 13.8%, with a strong capital generation of 49 basis points before shareholder distributions.
Negative Updates
Impairment Charge and Economic Uncertainty
Reported a net impairment charge of GBP 189 million for the first quarter, equivalent to 19 basis points of loans on an annualized basis. Despite maintaining post-model adjustments at around GBP 300 million, heightened global economic uncertainty remains a concern.
Higher Operating Expenses Expected
Despite a decrease in first quarter costs to GBP 1.9 billion, NatWest expects operating expenses to be around GBP 8 billion for the full year, plus around GBP 100 million of onetime integration costs.
Potential Impact of Regulatory Environment
Concerns about the impact of ring-fencing regulations on cost and complexity of serving customers, potentially distorting decisions and limiting the bank's ability to support the economy.
Company Guidance
In the call, NatWest Group updated its 2025 guidance, expecting to be at the upper end of income and returns ranges. The first quarter saw customer lending grow by 0.9% to GBP 375 billion, with deposits rising 0.5% to GBP 433 billion. Income increased 15.8% year-on-year to GBP 4 billion, and costs were GBP 1.9 billion, resulting in an operating profit of GBP 1.8 billion and an attributable profit of GBP 1.3 billion. The return on tangible equity was 18.5%, with strong capital generation of 49 basis points before shareholder distributions. Earnings per share rose 48% to 15.5p, and the tangible net asset value per share was 347p, up 15% year-on-year. The CET1 ratio stood at 13.8%, with the government shareholding reduced to less than 2%. The bank's guidance now anticipates 2025 income at the upper end of GBP 15.2 billion to GBP 15.7 billion, with other operating expenses around GBP 8 billion, plus GBP 100 million in onetime integration costs, and a loan impairment rate below 20 basis points. RWAs are projected to be between GBP 190 billion and GBP 195 billion, with the return on tangible equity expected at the upper end of 15% to 16%.NatWest Group Financial Statement Overview
Summary
NatWest Group maintains a healthy financial profile with strong equity and improving cash flow. Despite some volatility in profitability and cash flow management, the company's consistent revenue and equity growth provide a solid foundation for future operations. Continued focus on maintaining profitability and stable cash flow will be crucial for long-term success.Income Statement
NatWest Group's income statement reveals moderate financial health with a solid gross profit margin, but the net profit margin has shown fluctuations due to varying net income over the years. The revenue growth rate is relatively stable, indicating consistent business operations. However, the absence of recent EBIT and EBITDA data limits a comprehensive profitability assessment.75
Positive
Balance Sheet
The balance sheet demonstrates strong equity with a favorable equity ratio and zero total debt in the latest period, reducing financial risk. The return on equity is robust, indicating effective use of equity in generating profits. The consistent increase in stockholders' equity highlights a stable financial position, but the high total liabilities warrant attention.80
Positive
Cash Flow
Cash flow analysis shows improvements, with positive free cash flow in the latest year after previous deficits, indicating better cash management. The operating cash flow to net income ratio suggests that cash earnings are catching up with accounting earnings, yet historical fluctuations in cash flows present potential volatility concerns.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 20.90B | 14.65B | 14.78B | 16.15B | 12.04B | 13.08B |
| Gross Profit | 17.45B | 14.34B | 14.17B | 13.35B | 10.34B | 10.80B |
| EBITDA | 6.59B | 7.25B | 7.12B | 6.00B | 4.55B | 361.00M |
| Net Income | 4.36B | 4.80B | 4.39B | 3.59B | 3.27B | -372.00M |
Balance Sheet | ||||||
| Total Assets | 690.34B | 707.99B | 692.67B | 720.05B | 781.99B | 799.49B |
| Cash, Cash Equivalents and Short-Term Investments | 115.83B | 93.05B | 104.52B | 145.06B | 177.76B | 124.49B |
| Total Debt | 41.87B | 0.00 | 127.26B | 6.26B | 8.43B | 9.96B |
| Total Liabilities | 41.87B | 668.61B | 655.49B | 683.56B | 8.43B | 9.96B |
| Stockholders Equity | 37.52B | 39.35B | 37.16B | 36.49B | 41.80B | 43.86B |
Cash Flow | ||||||
| Free Cash Flow | 930.00M | 694.00M | -14.92B | -44.24B | 52.79B | 28.72B |
| Operating Cash Flow | 930.00M | 1.77B | -13.37B | -43.60B | 53.69B | 29.09B |
| Investing Cash Flow | 0.00 | -12.70B | -14.69B | 19.06B | 3.06B | 7.55B |
| Financing Cash Flow | 0.00 | -1.89B | -15.67B | -10.65B | -2.60B | 90.00M |
NatWest Group Technical Analysis
Positive
14.05
Price Trends
13.58
Positive
12.52
Positive
11.03
Positive
Market Momentum
0.07
Positive
53.55
Neutral
53.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWG, the sentiment is Positive. The current price of 14.05 is below the 20-day moving average (MA) of 14.11, above the 50-day MA of 13.58, and above the 200-day MA of 11.03, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 53.55 is Neutral, neither overbought nor oversold. The STOCH value of 53.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NWG.
NatWest Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $87.65B | 7.90 | 19.22% | 6.12% | 19.48% | 26.26% | |
80 Outperform | $212.07B | 11.24 | 10.83% | 3.25% | -1.91% | -6.79% | |
78 Outperform | $122.52B | 8.87 | 13.25% | 3.01% | 0.26% | 19.35% | |
77 Outperform | $64.96B | 9.43 | 9.36% | 2.94% | 11.33% | 47.74% | |
77 Outperform | $55.86B | 9.39 | 13.70% | 3.81% | 18.85% | 14.85% | |
76 Outperform | $68.50B | 10.36 | 11.92% | 12.40% | -0.63% | -6.01% | |
67 Neutral | $16.66B | 11.44 | 9.71% | 3.91% | 11.61% | -10.70% |
* Financial Sector Average
Performance Comparison
NWG
NatWest Group
14.05
6.33
81.99%
BBVA
Banco Bilbao
15.27
5.67
59.06%
BCS
Barclays
18.61
8.06
76.40%
HSBC
HSBC Holdings
60.82
19.62
47.62%
ING
ING Groep
21.98
5.46
33.05%
SAN
Banco Santander SA
8.24
3.62
78.35%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.