HomeFinancial MarketsNatWest Shares Drop Following Underwhelming Quarterly Results

NatWest Shares Drop Following Underwhelming Quarterly Results

NatWest Group Plc achieved a lower-than-expected operating profit before tax of £1.086 billion for the third quarter, with the bank’s Alison Rose commenting that the UK’s economic outlook has worsened, thereby having an impact on consumer activity.

“We’re not seeing delinquencies, we’re not seeing customers going into default but the outlook is more challenging so we’re weighting more to the downside,” Rose explained. The company pinpoints its bigger-than-expected charges for souring loans as the main reason for its underwhelming financial performance.

The bank’s provisions for bad loans added up to £247 million for the period, outweighing analysts’ estimates of £163.4 million. As a result, NatWest has adjusted its economic outlook for the coming year, with the group expecting income to be higher while costs become less predictable.

One silver lining for the third period was NatWest’s mortgage business which continued to grow. Overall net loans to customers rose by 2.2% to £4.1 billion. This prompted the group to extend its early refinancing window from four to six months so that customers can receive the opportunity to refinance at better rates.

Following the quarterly results announcement, NatWest’s shares on the London Stock Exchange fell by 6.9%.

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