Natwest Group Share Price Forecast November 2021 – Time to Buy NWG?

Shares of majority state-owned British banking and insurance holding company Natwest Group (LSE: NWG)  are in the green today, currently trading at 221p at the time of writing. It recently released its third-quarter results which indicated that profits before impairments for the three months to 30 September increased by 37%. But overall pre-impairments profits dropped by 2.5% for the first nine months of the year.

Natwest Group – Technical Analysis

Natwest’s financial statement indicates a market cap of £24.861 billion with total assets worth £778.278 billion. Revenue for 2020 was at £14.24 billion with a profit margin of -5.11% compared to £16.21 billion in 2019.

Moving averages such as Exponential Moving Average (20)(221.7), Simple Moving Average (20)(223.6),  Exponential Moving Average (30)(222.1) and Simple Moving Average (30)(225.7) are indicating a sell action. Oscillators such as Relative Strength Index (14)(48.9), Stochastic %K (14, 3, 3)(41.8), Commodity Channel Index (20)(−25.7), Average Directional Index (14)(27.7) and Awesome Oscillator(−7.1) are neutral.

68% of all retail investor accounts lose money when trading CFDs with this provider.

 

Recent Developments

The Natwest Group also includes other brands such as RBS, Coutts, and Ulster Bank, providing much-needed exposure to wide array of banking sectors such as retail, private, investment and capital market banking. Following the 2008 economic crisis, the Uk government has become one of the largest shareholders at Natwest, owning around 50%  of the company. The bank has won numerous accolades for having the best mobile app in an increasingly digital banking space. It recently completed the acquisition of RoosterMoney, an app that os focused on pocket money and financial education for children

The United Kingdom experienced quite the rough 2020 when the country was in the grips of the pandemic. With economic activities coming to a grinding halt almost, businesses such as Natwest saw reduced opportunities to generate profits. The business has come roaring back in 2021 as many other companies experienced bountiful profits and rocketing share prices in 2021. As many cash-flush individuals and enterprises are the bank’s customers, the success of the private sector will be good news for Natwest.

The third-quarter results also revealed some other positive metrics. It recorded an operating profit of £1,074 million during the quarter which is ahead of an analyst consensus of £677 million and the £355 million recorded in the same quarter a year ago. The bank incurred £294 million in litigation and conduct costs as a result of NatWest’s breaches of UK money laundering regulations. According to the report by the FCA, Natwest failed to adequately monitor a client’s suspect deposits totaling around £365 million over five years. Natwest has benefited from this by setting aside more than needed during the pandemic to cope with bad debts and other risks.

Should You Buy NWG Shares?

There are a number of risks associated with Natwest, including the lack of controls for money-laundering prevention. It is coming under increased pressure from the increasingly competitive banking industry. Recent listings like Wise, indicate that Fintech firms are gaining traction. Thus, the key for Natwest would be to focus on digitization to hold its current market share.

Investors must remember that the financial statements of banks such as Natwest can be complex. For investors, issues such as the cyclicality of bank businesses and difficulties around research can get in the way of timing investments. Currently, the shares are valued at near 223p with a forward-looking dividend yield estimated to be just over 4% next year. With so much uncertainty regarding the bank, now is not the time to buy its shares.

Buy NWG at eToro with 0% Commission Now!