Financial Data and Key Metrics Changes - Lending has grown 4.4% since the year-end to £388 billion, consistent with an annual growth rate of over 4% over the past six years [3][5] - Income increased to £12.1 billion, representing a 12.5% rise compared to the first nine months of the previous year [4][5] - Operating profit reached £5.8 billion, with attributable profit at £4.1 billion, and return on tangible equity was reported at 19.5% [5][6] - Earnings per share grew by 32.4% year-on-year, and TNAV per share increased by 14.6% to 362 pence [6] Business Line Data and Key Metrics Changes - Mortgage lending increased by over £5 billion for the first nine months, supported by new offers for first-time buyers and family-backed mortgages [3] - Unsecured lending grew by £2.9 billion, or 17.3%, with successful integration of recently acquired Sainsbury's customers [3] - Commercial and institutional lending grew by £7.9 billion, or 5.5%, particularly in infrastructure, social housing, and sustainable finance [3][4] - Deposits increased by 0.8% to £435 billion, reflecting a balance between volume and value in a competitive market [4][11] Market Data and Key Metrics Changes - The bank attracted an additional 70,000 new customers in the quarter, indicating strong customer activity [3] - Assets under management and administration grew by 14.5% to £56 billion, contributing to non-interest income growth [4] Company Strategy and Development Direction - The company is focused on disciplined growth, bank-wide simplification, and effective balance sheet and risk management [2] - A new share buyback of £750 million was announced, with 50% already executed [5] - The company aims to support customers while investing in the business and delivering attractive returns to shareholders [5][15] Management's Comments on Operating Environment and Future Outlook - Management noted that despite inflation being above the Bank of England's target, the economy is growing with low unemployment and wage growth exceeding inflation [2] - The company expects one further base rate cut this year, with rates projected to reach 3.75% by year-end [10] - Full-year income guidance has been revised to around £16.3 billion, with returns expected to exceed 18% [5][10] Other Important Information - The cost-income ratio improved by five percentage points to 47.8%, with operating expenses up 2.5% to £5.9 billion [5][12] - The CET1 ratio at the end of the third quarter was 14.2%, up 60 basis points from the previous quarter [13][14] Q&A Session Summary Question: Deposit momentum and non-interest income drivers - Management indicated that deposits are up around £3.5 billion year-to-date, with different trends across business lines. Retail fixed-term outflows were noted, but current account balances are up [17][18] - Non-interest income showed strong momentum, particularly in cards, payments, and capital markets, with a focus on maintaining this growth [20] Question: Cost growth expectations and capital management - Management reiterated cost guidance for the year, emphasizing ongoing simplification efforts and the potential for cost control despite inflationary pressures [23][24] - Capital management remains a priority, with expectations for CRD4 impacts in Q4 and a focus on maintaining a CET1 ratio above 13% [28][30] Question: Loan growth sustainability and income drivers - Management expressed confidence in maintaining loan growth above market levels, with a strong track record across all business lines [48][55] - Future income growth is expected to continue, supported by strong customer demand and effective capital deployment [37][41] Question: Non-interest income and market performance - The strong performance in NatWest markets is attributed to strategic integration and robust customer demand, with expectations for continued performance despite market volatility [44][46] Question: Liquidity management and deposit outflows - Management acknowledged a rotation in liquidity from cash to government bonds, with a focus on maintaining a balanced portfolio [79][82]

Core Insights - NatWest's share price has experienced a significant bull run, reaching its highest level since 2008 [1] - The share price has increased by 62% from its lowest point this year, indicating strong market performance [1] - The company's market capitalization has surpassed $60 billion, reflecting its robust growth [1]

Financial Performance - NatWest Group's customer loans reached £435 billion, a 4.4% increase compared to December 2024[5] - Customer deposits totaled £56 billion, up 0.8% from December 2024[5] - Assets Under Management (AUMA) grew to £12.1 billion, a 14.5% increase since December 2024[5] - The Group's attributable profit was £4.1 billion, with a Return on Tangible Equity of 19.5%, compared to 17.0% in the first nine months of 2024[5] - Earnings Per Share (EPS) increased by 32.4% compared to the first nine months of 2024, reaching 51 pence[5] Income and Expenses - Net interest income, excluding notable items, for the first nine months of 2025 was £9.388 billion, a 13.0% increase compared to the same period in 2024[8] - Total income, excluding notable items, for the first nine months of 2025 was £12.128 billion, a 12.5% increase compared to the first nine months of 2024[8] - Other operating expenses for the first nine months of 2025 were £5.884 billion, a 2.5% increase compared to the same period in 2024[8] Capital and Ratios - The CET1 ratio stood at 14.2%, reflecting a 202 basis points capital generation in the first nine months of 2025[5] - Tangible Net Asset Value (TNAV) per share increased by 14.6% compared to the first nine months of 2024, reaching 362 pence[5] - The loan impairment rate was 17 basis points for the first nine months of 2025[8] Lending and Deposits - Total lending across three key business areas increased by £16.3 billion, a 4.4% rise[12] - Customer deposits increased by £3.4 billion, representing a 0.8% growth[15]

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The high-street bank reported a jump in operating pretax profit as it raised revenue and profitability guidance for the second time this year. ...

NatWest reported a 30% rise in third-quarter profit on Friday and upgraded its performance target for the year, as it grew loans and assets in its wealth business while avoiding hefty charges for mis-... ...

Core Viewpoint - NatWest share price has remained stable as investors anticipate the upcoming quarterly results, currently trading at 537p, slightly below the year-to-date high of 562p [1] Summary by Relevant Sections - **Share Price Performance** - NatWest share price was trading at 537p on Wednesday, which is a few points below the year-to-date high of 562p [1]

Core Viewpoint - NatWest has been in a restructuring phase for several years following the global financial crisis of 2008-09, which has affected its standing among European banks [1]. Group 1: Company Overview - NatWest (NYSE: NWG) has not been favored among European banks for a significant period due to its ongoing restructuring efforts [1]. Group 2: Analyst Background - The analysis is provided by a fund manager/analyst with over 18 years of experience in the financial sector, specializing in portfolio management [1].

Core Insights - Income investors prioritize generating consistent cash flow from liquid investments, with dividends being a key focus for returns [2][5] Company Overview - NatWest Group (NWG), headquartered in London, has experienced a price change of 37.17% this year and currently pays a dividend of $0.25 per share, resulting in a dividend yield of 3.57% [3] - The company's dividend yield surpasses the Banks - Foreign industry's yield of 3.16% and the S&P 500's yield of 1.49% [3] Dividend Growth - NatWest Group's current annualized dividend of $0.50 reflects a 13.6% increase from the previous year [4] - Over the past five years, the company has raised its dividend five times, averaging an annual increase of 47.67% [4] - The current payout ratio is 50%, indicating that the company distributes half of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - The Zacks Consensus Estimate for NatWest's earnings in 2025 is projected at $1.61 per share, representing a year-over-year growth rate of 21.05% [5] Investment Considerations - Established firms with secure profits are typically viewed as the best dividend options, while high-growth businesses rarely offer dividends [6] - Despite challenges for high-yielding stocks during rising interest rates, NWG presents a compelling investment opportunity as a strong dividend play [6] - The stock currently holds a Zacks Rank of 3 (Hold) [6]

Core Viewpoint - Investors are evaluating NatWest Group (NWG) and Nordea Bank AB (NRDBY) as potential undervalued stocks in the foreign banking sector, with NWG currently appearing as the superior value option based on various valuation metrics [1][7]. Valuation Metrics - Both NWG and NRDBY have a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and an improving earnings outlook for both companies [3]. - NWG has a forward P/E ratio of 8.96, while NRDBY has a forward P/E of 10.07, suggesting NWG is more attractively priced [5]. - The PEG ratio for NWG is 0.82, indicating a favorable valuation relative to its expected EPS growth, whereas NRDBY has a PEG ratio of 3.26, suggesting it may be overvalued [5]. - NWG's P/B ratio is 1.04, compared to NRDBY's P/B of 1.64, further supporting NWG's position as the better value option [6]. - Based on these metrics, NWG has earned a Value grade of B, while NRDBY has a Value grade of D, highlighting the relative undervaluation of NWG [6].