18th Feb 2022 08:16
(Alliance News) - NatWest Group PLC on Friday reported a profit for 2021 and said it plans to return GBP750 million to shareholders via a share buyback, with possibly even more to come.
Net interest income for 2021 rose 1.7% to GBP7.61 billion from GBP7.48 billion the year before, though a dip in non-interest income meant total income for the year was flat at GBP10.51 billion - slightly below consensus which had stood at GBP10.70 billion.
The lender swung to a pretax profit of GBP4.03 billion, slightly above the GBP4.02 billion expected by analysts, from a loss of GBP481 million the year before, benefiting from an impairment release of GBP1.28 billion versus an expense of GBP3.13 billion. The 2021 profit figure neared 2019's result of GBP4.23 billion.
The impairment release "principally reflects releases in non-default portfolios and the low levels of realised losses we have seen across the year," the bank said.
Natwest laid out plans for a GBP750 million share buyback in the first half of 2022 and said it will consider further repurchases as part of its capital distribution approach. This was alongside a final dividend of 7.5 pence, more than double 3.0p the year before.
The state-controlled lender also said it will maintain capacity to participate in buybacks of shares held by the UK government.
"The net impairment release of nearly GBP1.3 billion, bumper profits, and strong capital reserves point to a bank in good health. The increased dividend and share buyback programme suggest NatWest's management team are optimistic about the year ahead, while rising interest rates should only benefit its core business," said Zoe Gillespie, investment manager at Brewin Dolphin.
For 2022, NatWest expects income excluding notable items to be above GBP11.0 billion in the 'go-forward group' - which excludes Ulster Bank RoI and discontinued operations - and it plans to invest around GBP3 billion over 2021 to 2023 while reducing operating costs.
"As our economy recovers and the trend towards digital services accelerates, we are investing to deliver long term value in the bank and drive sustainable growth. We will do this by building closer and deeper relationships with our customers and by supporting their evolving needs and expectations at every stage of their lives," said Chief Executive Alison Rose.
Shares in NatWest were down 0.5% at 239.10 pence in London early Friday.
By Lucy Heming; [email protected]
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