A further £2.1bn in impairment charges during the second quarter meant NatWest’s (NWG) £1.7bn operating loss during the period was more than four times greater than the market had been expecting. A deteriorating economic picture across the UK and Ireland meant the lender, formerly known as Royal Bank of Scotland, took £2.9bn in loan loss provisions over the entire first half, but management believes that it has taken the worst of the pain, anticipating a further £0.6bn-£1.6bn in impairments during the remainder of the year.
The markets business may have enjoyed a 44 per cent jump in income following the second-quarter rally but it was scant consolation for the pressure placed on the net interest margin from the reduction in the base rate. That led to a 9 per cent contraction in income for the core retail and commercial banking activities.
Consensus forecast for net tangible assets at the end of December is 265p a share, rising to 271p the same time the following year.
| NATWEST (NWG) | ||||
| ORD PRICE: | 108p | MARKET VALUE: | £ 13.1bn | |
| TOUCH: | 108-108.45p | 12-MONTH HIGH: | 265p | LOW: 100p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 33 | |
| NET ASSET VALUE: | 355p | LEVERAGE: | 22 | |
| Half-year to 30 Jun | Total operating income (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p)* |
| 2019 | 7.12 | 2.69 | 16.9 | 2.0 |
| 2020 | 5.84 | -0.77 | -5.8 | nil |
| % change | -18 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Excludes special dividends of 12p in 2019 | ||||
