NatWest’s investors will be hoping for good news on the banking group’s finances next week, as it looks to shrug off the turmoil of the recent debanking saga and prepares to sell its shares to the public.
The group, which also owns Royal Bank of Scotland, Ulster Bank and Coutts, will unveil its fourth quarter earnings and full-year financial results on Friday.
It is expected to report a pre-tax profit of £6 billion for the year, with an income totalling £14.6 billion, according to a consensus compiled by analysts in November.
Investors were spooked in October when the bank downgraded its forecast net interest margin (NIM) for the year, leading its share price to tumble.
The NIM is an important measure for banks of their general health and profitability because it shows the difference between what it pays out to savers and what it receives from interest on loans.
Banks have been benefiting from higher borrowing costs, meaning they can charge people more for loans including mortgages, but have also been under pressure to reward savers by passing on higher rates.
NatWest said its financial performance is likely to be affected by more customers moving money into higher-interest savings accounts.
Peter Rothwell, the head of banking for KPMG, said there is “clearly a big market focus” on margins and investors will be looking for clarity on the outlook.
“There will be a focus on to what extent is the consumer and small business proving resilient, and how long can they stay resilient for,” he added, with provisions for bad loans and signs more borrowers are falling behind on repayments likely to be examined.
Meanwhile, NatWest will be hoping to begin drawing a line under the debanking saga which rocked the bank last year.
Former Ukip leader Nigel Farage accused Coutts, a high-net-worth bank owned by the group, of deciding to close his account because it did not agree with his political views.
It sparked a wider political debate over freedom of speech and the powers UK banks have to debank people, and resulted in the resignations of NatWest’s and Coutts’ bosses, Dame Alison Rose and Peter Flavel.
Dame Alison was replaced by Paul Thwaite on an interim basis, and investors will be expecting the bank to confirm a permanent successor to the top job soon.
NatWest is also gearing up to sell its shares to everyday investors as early as the summer.
The retail offer was first announced by Chancellor Jeremy Hunt during his autumn statement last year, as the Government leaps forward in its efforts to fully offload its stake in the bank.