NatWest share price rose by over 1% on Thursday after Lloyds Bank, its biggest competitor, published its strong financial results. NWG jumped to a high of 505p, its highest level since July 2nd, and 7.28% from its lowest point this month. 

NatWest earnings ahead

NatWest Group, the parent company of Royal Bank of Scotland, Coutts, and NatWest Bank, will be in the spotlight on Friday as it publishes its financial results. 

These results will come a day after Lloyds Bank, its biggest competitor, released solid numbers. Lloyds said that its pretax profit jumped to £1.99 billion in the three months to June, helped by the high interest rates. The profit was higher than the median estimate of £1.75 billion.

The company also benefited from interest rates, which have remained significantly high as the Bank of England (BoE) has slashed them more slowly than expected. As a result, the company raised its dividend by 15% and maintained its forward guidance.

NatWest is widely seen as a closer peer to Lloyds than other FTSE 100 banks like Barclays, HSBC, and Standard Chartered. That’s because the two companies have similar business models and do not operate in international or investment banking sectors. 

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Analysts are optimistic that NatWest Group’s business continued doing well in the last quarter. The average estimate is that its net interest income will be £3.1 billion, an increase from the previous £3.02 billion. 

Its non-interest income is expected to decrease to £849 million from £954 million, resulting in a total income of £3.955 billion. 

Further data shows that the average profit for the period will be £1.2 billion, down from £1.3 billion in the same period last year. Judging by Lloyds’ results, there is a likelihood that the company’s results will be much higher than expected. 

These results come three days after the company unveiled its modernization process by hiring Amazon’s AWS and Accenture. The company hopes that the five-year process will help it introduce advanced cloud and AI solutions. It will also help it to have disciplined growth, simplify its operations, and improve its balance sheet and risk management. Paul Thwaite, its CEO said:

“Equipped with high-quality data, we can continue to quietly revolutionise how we serve our customers through the use of AI and other technologies in order to provide more personalised products and services as a trusted partner in the moments that matter most.”

NatWest share price analysis

NWG stock chart | Source: TradingView

The daily chart shows that the NWG stock price bottomed at 471p on July 2nd and then bounced back to over 500p today. It has remained above the 50-day and 100-day Exponential Moving Averages (EMA), which have provided it with substantial support.

NatWest share price has also jumped above the upper side of the descending channel, which is part of the bullish flag pattern. A bullish flag is one of the most popular bullish continuation signs in technical analysis. 

Therefore, the stock will likely continue rising after its earnings. If this happens, the next level to watch will be the year-to-date high of 536p. 

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