NatWest Group Reports Strong 2024 Annual Results, Exceeding Guidance
Why we think this is good
NatWest Group has delivered a robust financial performance for 2024, exceeding its upgraded guidance. The bank reported a strong return on tangible equity of 17.5% and an attributable profit of £4.5 billion. The 26% increase in total dividend to 21.5 pence per share demonstrates management's confidence in the bank's financial health and future prospects. Growth in both loans and deposits, along with a solid capital position, further underpin the positive outlook. While there are some cost pressures and impairment charges to consider, the overall picture is one of a well-performing bank navigating the current economic environment successfully.
Key Points
- Income excluding notable items reached £14.6 billion
- Return on tangible equity of 17.5%, exceeding upgraded guidance
- Attributable profit of £4.5 billion, with EPS up 12% to 53.5 pence
- Final dividend increased by 26% to 21.5 pence per share for the year
- Net loans to customers grew by £12.9 billion (3.6%)
- Customer deposits increased by £12.2 billion (2.9%)
- CET1 ratio at 13.6%, within the targeted range
- 2025 targets set: RoTE of 15-16%, income of £15.2-15.7 billion
- Other operating expenses up £213 million (2.8%) compared to 2023
- Net impairment charge of £359 million for 2024
Summary
NatWest Group's 2024 annual results showcase a strong financial performance, with income excluding notable items reaching £14.6 billion and a return on tangible equity of 17.5%, surpassing the bank's upgraded guidance. The attributable profit stood at £4.5 billion, with earnings per share increasing by 12% to 53.5 pence. Notably, the bank has proposed a final dividend of 15.5 pence per share, bringing the total for the year to 21.5 pence, a 26% increase from 2023. This significant dividend hike signals management's confidence in the bank's financial health and future prospects.
The bank's balance sheet showed robust growth, with net loans to customers increasing by £12.9 billion (3.6%) and customer deposits rising by £12.2 billion (2.9%). The CET1 ratio of 13.6% remains within the targeted range, indicating a strong capital position. While other operating expenses increased by £213 million (2.8%) compared to 2023, and there was a net impairment charge of £359 million, these factors were outweighed by the overall positive performance.
Looking ahead, NatWest Group has set ambitious targets for 2025, including a return on tangible equity range of 15-16% and income excluding notable items in the range of £15.2-15.7 billion. The bank's strong performance and positive outlook are reflected in recent broker recommendations, with several 'Buy' and 'Overweight' ratings.