The following is a summary of the NatWest Group PLC (NWG) Q1 2024 Earnings Call Transcript:
Financial Performance:
NatWest reported Q1 customer lending of £361bn, marking the sixth straight year of lending growth.
Deposit balances exceeded expectations, rising to £420bn.
Assets under management and administration increased to £43bn.
Generated Q1 income was £3.4bn, with costs of £2bn, rendering an operating profit of £1.3bn.
An attributable profit of £0.9bn resulted in a return on tangible equity of 14.2%, with a 3.4% increase in tangible net asset value per share to 302p.
CET1 ratio increased to 13.5% for Q1, which included an accrual of £367m towards interim dividend.
The bank completed a £500m buyback program from the previous year and began a new £300m buyback announced in February 2024.
The net interest margin was 205 basis points, up 6 points from the last quarter.
Business Progress:
Net lending to UK corporates continued to rise as business confidence improved.
The bank is planning to complete the existing £300m buyback by July 2024 and has the capacity for another buyback that is set to commence in late May.
Total bank levies for the year are expected to be around £200m, a 50% increase from the previous year.
The bank is expecting to maintain an impairment rate below 20 basis points for full year 2024.
The company is positive about mortgage and commercial sectors and expects to grow in these areas.
Confidence in the market is causing more customer activity, and this trend is expected to continue throughout the year.
The company has factored in some share price movement and Basel III.1 implementation in their capital plans.
The dividends will follow a formulaic policy around a 40% payout, with the prior year's dividends being 17p per share.
Aims of achieving a RoTE target of greater than 13% in 2026 were expressed.
More details: NatWest IR
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