NWG Natwest Group Plc

By Sabela Ojea

NatWest Group PLC shares rose in early trading Friday after it reported operating pretax profit and revenue ahead of market expectations for the second quarter of 2022, and a stable set of operating expenses.

Shares at 0709 GMT were up 18.30 pence, or 8%, at 248.30 pence.

The U.K. bank posted an operating pretax profit of 1.40 billion pounds ($1.70 billion) compared with GBP1.56 billion for the same period a year earlier. Operating pretax profit had been expected to fall to GBP940 million, according to the lender's compiled consensus for the period.

The FTSE 100 company's total income rose to GBP3.21 billion from GBP2.66 billion for the same period a year earlier compared with expectations of GBP2.90 billion, taken from the lender's compiled forecasts for the period.

NatWest's common equity Tier 1 ratio--a key measure of balance-sheet strength--fell to 14.3% from 15.2% as at March 31 and from an expected ratio of 15.1%, while its return on tangible equity increased to 15.2% from 11.3%.

The board declared an interim dividend of 3.5 pence a share, up 17% on 2021, and a special dividend with share consolidation of GBP1.75 billion, or 16.8 pence a share.

The bank said that it expects to close 2022 with a CET 1 ratio of around 14%, and to end 2023 with a return on tangible equity in the range of 14% to 16%.

Natwest also expects to reduce operating expenses by around 3% in 2022 after booking expenses of GBP1.83 billion for the second quarter of the year and total costs of GBP3.65 billion for the first half.

"We know that continued increases in the cost of living are impacting people, families and businesses across the U.K. and we have put in place a range of targeted measures to support those who are likely to need it most. Our strong levels of profitability and capital generation mean we are well positioned to provide this support," Chief Executive Alison Rose said.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

(END) Dow Jones Newswires

July 29, 2022 03:27 ET (07:27 GMT)

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