The FTSE 100 is down for the fourth straight day as investors reflect on the latest NatWest earnings and the rising yields in the United States. The index is trading at £6,600, which is lower than this week’s high of £6,795.
FTSE news: The biggest story in the FTSE 100 will be about NatWest, formerly known as Royal Bank of Scotland (RBS). The company delivered its annual and quarterly earnings a day after Barclays did the same. In total, the firm made a loss of £753 million in 2020 mostly because of the record impairment charge of £3.2 billion. Before these impairments, the firm had an operating income of more than £2.9 billion. The management said:
“We continue to experience relatively low levels of actual default in our lending book, which is well-diversified with limited exposure to unsecured loans.”
The earnings came a day after the bank said that it will exit its Irish business gradually. This business has a 15% market share of the country’s mortgage market and 20% of SME lending business. In recent years, other banks like Lloyds and Rabobank have also exited the market.
Further, according to Sky, NatWest is in the process of selling Adam & Co, its private bank. The small bank could fetch about £50 million. Additionally, NatWest said that it would maintain its dividends to about 40% of profits. It will distribute 800 billion pounds from 2021 to 2023.
NatWest share price has been on a recovery path in the past few months. It has risen by more than 88% from September.
NatWest share price chart
FTSE 100 technical outlook
The daily chart shows that the FTSE 100 index has formed a head and shoulders pattern. It has already completed the left shoulder and head and is in the process of finishing the right shoulder part. Therefore, there is a high probability that the index it will continue dropping as bears target the next support at 6,000.
FTSE index chart