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NatWest Group (NWG)
NYSE:NWG
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NatWest Group
(NYSE:NWG)
77Outperform
NatWest Group (NWG) vs. S&P 500 (SPY)
Market Cap
$48.32B
Dividend Yield4.47%
Average Volume (3M)7.74M
Price to Earnings (P/E)8.8
Beta (1Y)1.17
Revenue Growth18.85%
EPS Growth14.85%
CountryUS
Employees61,651
SectorFinancial
Sector Strength80
IndustryBanks - Diversified
Share Statistics
EPS (TTM)1.37
Shares Outstanding4,039,019,800
10 Day Avg. Volume3,948,139
30 Day Avg. Volume7,740,035
Financial Highlights & Ratios
PEG Ratio0.59
Price to Book (P/B)N/A
Price to Sales (P/S)2.73
Price to Cash Flow (P/CF)-1.50
P/FCF Ratio0.00
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 Covering1
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 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 | ||||
| 21.27B | 14.65B | 14.78B | 13.16B | 10.51B | 10.80B | Gross Profit |
| 24.88B | 14.65B | 25.47B | 13.16B | 10.51B | 10.80B | EBIT |
| 2.98B | 0.00 | 7.12B | 7.66B | 4.26B | -289.00M | EBITDA |
| 1.40B | 0.00 | 7.12B | 6.00B | 4.55B | -1.00M | Net Income Common Stockholders |
| 4.36B | 4.80B | 4.39B | 3.59B | 3.27B | -434.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 57.01B | 93.05B | 104.52B | 145.06B | 177.76B | 124.49B | Total Assets |
| 1.45T | 707.99B | 692.67B | 720.05B | 781.99B | 799.49B | Total Debt |
| 245.43B | 0.00 | 127.26B | 6.26B | 8.43B | 9.96B | Net Debt |
| 188.41B | -93.05B | -104.52B | -138.57B | -169.33B | -114.53B | Total Liabilities |
| 1.38T | 668.61B | 655.49B | 683.56B | 8.43B | 9.96B | Stockholders Equity |
| 75.13B | 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
12.17
Price Trends
11.28
Positive
10.55
Positive
9.58
Positive
Market Momentum
0.23
Positive
56.41
Neutral
34.29
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 12.17 is above the 20-day moving average (MA) of 11.86, above the 50-day MA of 11.28, and above the 200-day MA of 9.58, indicating a bullish trend. The MACD of 0.23 indicates Positive momentum. The RSI at 56.41 is Neutral, neither overbought nor oversold. The STOCH value of 34.29 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $202.85B | 9.17 | 13.74% | 5.73% | 6.79% | 8.57% | |
81 Outperform | $54.90B | 8.36 | 9.14% | 2.77% | 8.58% | 35.39% | |
79 Outperform | $681.30B | 12.34 | 17.28% | 1.97% | 17.07% | 21.78% | |
77 Outperform | $48.32B | 8.77 | 13.34% | 4.47% | 18.85% | 14.85% | |
76 Outperform | $57.22B | 11.86 | 9.95% | 3.82% | 36.29% | -19.79% | |
66 Neutral | $132.77B | 11.87 | 6.04% | 3.13% | 8.20% | 49.26% | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% |
* Financial Sector Average
Performance Comparison
NWG
NatWest Group
11.85
5.08
75.04%
BCS
Barclays
14.31
4.89
51.91%
C
Citigroup
63.05
4.17
7.08%
HSBC
HSBC Holdings
57.97
21.16
57.48%
JPM
JPMorgan Chase & Co.
228.69
36.30
18.87%
LYG
Lloyds Banking
3.67
1.15
45.63%
NatWest Group Earnings Call Summary
Earnings Call Date: Feb 14, 2025 | % Change Since: 13.31% | Next Earnings Date: May 2, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with upgraded guidance, significant lending growth, and sustainable funding achievements. However, concerns about impairment charges and expected lower income in Q4 present challenges.Highlights
Upgraded Full Year Income and Returns Guidance
NatWest Group upgraded its full year income and returns guidance, reflecting progress in strategic priorities and support to customers.
Broad-Based Customer Lending Growth
Customer lending grew by GBP 8.1 billion to GBP 367 billion, with notable contributions from corporate and commercial mid-market customers.
Climate and Sustainable Funding Achievements
GBP 23.5 billion of climate and sustainable funding provided, bringing the total to GBP 85.4 billion since July 2021.
Increased Share in Credit Cards
Credit card market share increased from 8.5% to 9.3%.
Strong Capital Generation and Earnings
Generated 197 basis points of capital in the first 9 months, with a CET1 ratio of 13.9% and earnings per share up 12% year-on-year.
Increased Assets Under Management
Private Bank assets under management increased by GBP 5.7 billion to GBP 46.5 billion, including GBP 2.2 billion of net new inflows.
Improved Return on Tangible Equity
Return on tangible equity was 18.3% in the third quarter.
Lowlights
Impairment Charges
An impairment charge of GBP 245 million or 25 basis points of loans was recorded in the third quarter.
Income Guidance for Q4
Income for Q4 is expected to be lower than Q3 due to seasonality and expected base rate cuts.
Higher Operating Expenses Expected
Operating expenses for Q4 are expected to be higher than the previous year due to severance, property costs, and bank levy charges.
Company Guidance
During the NatWest Group Q3 2024 earnings call, the management upgraded their full-year guidance for income and returns, reflecting strong financial performance across various metrics. Over the first nine months, the group achieved customer lending growth of GBP 8.1 billion, bringing the total to GBP 367 billion, and contributed GBP 23.5 billion in climate and sustainable funding. Mortgage volumes improved, with the acquisition of a GBP 2.3 billion portfolio from Metro Bank. The bank's credit card market share increased from 8.5% to 9.3%, and customer deposits grew by GBP 8.3 billion to GBP 427 billion. Private Bank assets under management rose by GBP 5.7 billion to GBP 46.5 billion. For the period, NatWest generated an income of GBP 10.8 billion, with operating profit reaching GBP 4.7 billion and attributable profit amounting to GBP 3.3 billion. The return on tangible equity stood at 17%, and earnings per share increased by 12% to 38p. The CET1 ratio was 13.9%, supported by 197 basis points of capital generation. The bank anticipates full-year income of around GBP 14.4 billion and a return on tangible equity greater than 15%.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.