By Elena Vardon

NatWest is scheduled to report results for the fourth quarter of 2024 on Friday. Here is what you need to know:

PRETAX PROFIT: The U.K. bank is expected to post an operating pretax profit of 1.38 billion pounds ($1.71 billion) for the three months to Dec. 31, according to the latest company-compiled consensus based on 11 analysts' estimates. This compares with an operating pretax profit of 1.26 billion pounds for the same period of 2023.

TOTAL INCOME: The lender's total income for the period is expected at 3.71 billion pounds by the same consensus, with a 2.93 billion pound contribution from net interest income. This compares with a total income of 3.54 billion pounds for the same quarter a year prior, which included 2.64 billion pounds billion in net interest income.

COSTS: The FTSE 100 group's operating expenses are forecast to amount to 2.14 billion pounds for the three-month period.

Shares in NatWest gained 17% over the fourth quarter. They last closed at 450 pence.

WHAT TO WATCH:

-- The bank is expected to introduce guidance for 2025. Consensus pencils in 15.37 billion pounds in total income. Estimates point to a continued rise in net interest income--the difference between what banks earn on loans and what they pay clients for deposits--to 11.99 billion pounds thanks to loan growth and the structural hedges that NatWest has in place to mitigate the impact of interest-rate cuts by the Bank of England.

-- Its return on tangible equity result for the quarter will be in focus as well as whether the bank raises its 2026 target for the metric which is currently at more than 13%. Consensus pencils in a 13.9% return for the fourth quarter and a 15.8% one for next year.

--The lender's common equity Tier 1 ratio--a key measure of balance-sheet strength--is expected to stand at 13.6% at the end of the period, compared with 13.9% a quarter prior. The market will watch how the result compares with its target for a ratio in the 13% to 14% range.

-- Investors will be looking out for any fresh details from management on the plans from the U.K. government--which has reduced its stake in the bank it bailed out during the financial crisis to under 8%--to return to private ownership in the first half of this year.

-- NatWest is expected to declare a 13.5 pence per share ordinary dividend and consensus pencils in a 914 million pound share buybacks for the period though some analysts don't expect a program until the second-quarter results. "We expect management focus will be on getting the remaining government stake out," Citi analysts wrote in a research note to clients.

-- "We expect a focus on the results call as to potential changes to the pattern of future capital deployment, perhaps more skewed to M&A," UBS analysts said, adding there is investor interest in strategic issues like acquisitions and the longer-term strategy.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

February 13, 2025 08:58 ET (13:58 GMT)

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