NatWest’s (LSE: NWG) stock tumbled 3.2% to 422.40 pence Friday as the bank’s conservative 2025 forecast eclipsed stronger-than-expected annual profits of £4.5 billion.
The high street lender achieved a 17.5% return on tangible equity, surpassing its own upgraded guidance. Total income hit £14.6 billion, propelled by robust deposit margins and expanded lending activities.
“The shares have had a very strong run over the past year and into these results,” noted Gary Greenwood, analyst at Shore Capital, who predicted a “neutral to slightly positive reaction” before the sharp decline materialized.
Customer growth accelerated with 500,000 new accounts, while commercial lending surged by £10 billion. The bank’s mortgage portfolio expanded by £3.2 billion as deposits swelled £12.2 billion to £431.3 billion.
Shareholders received £4 billion through dividends and buybacks, including a final dividend of 15.5p per share. This brought the total annual payout to 21.5p, marking a 26% increase from the previous year.
Looking ahead to 2025, NatWest projected more modest returns of 15-16% and total income between £15.2-£15.7 billion, signaling potential headwinds as interest rates are expected to decrease.
Trading volumes intensified through Friday morning as investors digested the mixed results, pushing shares to their lowest level this week.
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