In their latest assessment, RBC analysts have assigned a "Sector Outperform" rating to Natwest, following the bank's first-quarter report that exceeded expectations.
The analysts have raised their full-year profit before tax forecasts by three per cent to £7.1bn from an earlier prediction of £6.2bn for 2024. Additionally, they have increased the stock's target price to 475p from the previous figure of 465p, as reported by .
Attributing the positive revisions to a resilient net interest income (NII), which held steady in the face of declining interest rates, the analysts noted NII of £3bn for the first quarter, consistent with figures from the last quarter of 2024.
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Natwest's net interest margin, an essential index of banking profitability from lending, showed an eight basis point rise since the close of 2024, reaching 2.27 per cent.
These adjustments come in the wake of the Bank of England's rate reduction from the post-financial crisis peak of 5.25 per cent down to 4.5 per cent, with the Monetary Policy Committee slated to consider further rate changes on May 8.
Experts attributed the upgrade primarily to the retail banking sector, with some influence from the Commercial and Institutional division.
Boosted by a flurry of activity in retail banking mortgages as clients scurried to comply with the Stamp Duty deadline on March 31, the bank's net loans climbed by £3.4bn over the quarter.
Adjustments by Chancellor Rachel Reeves to the zero-rate thresholds for main residences saw these drop from £250k to £125k, while first-time homebuyers saw thresholds lowered from £425k to £300k.
Natwest to return £11.2bn to shareholders by 2027
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RBC has projected an income of £16bn for Natwest by 2025, which is above the bank's revised guidance at the "upper end" of around £15.2bn to £15.7bn.
Equity analysts Benjamin Toms and Pablo de la Torre Cuevas commented: "Natwest has had a strong start to 2025, and the bank's structural hedge will provide additional momentum as we go through the year,".
They added: "Significant growth in deposits or a softening of ring- fencing regulation could provide additional positive catalysts not yet reflected in consensus."
However, they noted that shares were trading 20 per cent more than the bank's tangible assets were expected to be valued in a year's time, leading them to see "more upside potential elsewhere amongst our 海角视频 banks coverage".
Between 2025 and 2027, analysts anticipate £11.2bn of shareholder returns, with £7.5bn through dividends and £3.8bn through buybacks.
It is widely expected that Natwest will re-enter full private ownership in the coming weeks after the government reduced its stake to below two per cent.
The taxpayer remained the majority shareholder in the company until March 2022, when the government sold a portion of its shares, reducing its stake to 48.1 per cent.