SHARE OF THE WEEK: NatWest kicks off Q1 earnings season for major banks after a rough few months for the industry
NatWest will kick off the first quarter earnings season for the big banks next week after a rough few months for the industry.
Analysts and shareholders will be looking for signs of possible fallout from the US bank runs, which last month saw the collapse of Silicon Valley Bank and resulted in the rescue of Swiss Credit Suisse by rival UBS.
But Russ Mould, investment director at AJ Bell, thinks there should be “no such drama” on home soil.
“British banks are more heavily regulated than their regional US counterparts and less exposed to specialized niche areas, while their stocks generally already trade at lower valuations than their US counterparts on a book value or net asset value per share basis,” he said.
Instead, Mold said markets will be eagerly watching Natwest CEO Alison Rose’s outlook for signs of deposit flight and loan growth slowdown, which will give a good indication of performance in the coming quarters.
Equities fell to a four-month low in March as the banking crisis gripped global markets. And while they’ve had a steady recovery, they’re still well below their January highs.
Barclays and Standard Chartered will also publish their quarterly results next week.
Turbulence likely weakened Barclays’ first quarter performance. But boss CS Venkatakrishnan is optimistic about the outlook.