Shares of the UK-based NatWest Group (GB:NWG) rallied today after the bank reported an impressive growth in its Q3 profits for 2024. NatWest posted a 35.3% year-over-year increase in the profit attributable to shareholders, reaching £1.17 billion. Meanwhile, operating profit before tax rose 26% to £1.67 billion in Q3. Following the results, NWG stock gained over 4% as of writing.
NatWest is among the top four banks in the UK that serves over 19 million customers.
NatWest Reports Favourable Numbers
NatWest’s Q3 performance was mainly driven by its lending and deposit business, along with margin expansion. The bank reported that customer deposits increased by £2.2 billion in Q3, while loans rose by £8.4 billion. At the same time, net interest margin (NIM) increased 8 basis points quarter-over-quarter to 2.18%.
NatWest Follows Barclays with Upgraded Outlook
Fueled by strong Q3 results, NatWest upgraded its outlook for the entire year of 2024. NatWest now expects a return on tangible equity (RoTE) exceeding 15% this year, an increase from its earlier forecast of 14%.
Additionally, NatWest has raised its income forecast due to slower-than-expected interest rate cuts. It now projects £14.4 billion in 2024, up from the previous estimate of £14 billion. Similarly, yesterday, its rival bank Barclays PLC (GB:BARC) increased its net interest income forecast to exceed £11 billion, up from its earlier estimate of merely reaching that target.
Speaking of competition, NatWest delivered stronger results than its largest rival, Lloyds Banking Group (GB:LLOY). Earlier this week, Lloyds reported a statutory pretax profit of £1.8 billion in Q3, down from £1.9 billion a year ago. Nonetheless, Lloyds maintained its guidance for 2024.
Overall, these UK banks posted solid performances and remain optimistic about 2024, despite a mixed British economic landscape marked by slower-than-expected growth.
Is NatWest a Good Stock to Buy?
According to TipRanks, NWG stock has a Strong Buy consensus rating, which is based on a total of 10 recommendations. The NatWest share price forecast is 398.38p, which is 4.4% above the current level.
