RBS share rebound from multi-year lows halted today as the earnings report disappointed investors. NatWest reported income of 3.8 billion in the first half of 2020, a drop of 3.75% from 2019 figure. RBS made a profit of £2 billion before the impairment charges.
NatWest took extra £2 billion impairments for bad loans in the 2Q. The impairment loss is up from £802m in the 1Q. NatWest reported a £770 million loss compared with a £2.7 billion profit in the first half of 2019.
The second-quarter income came at £1.9 billion, and the bank made a loss of £1.2 billion in the 2Q of 2020. The consensus estimate was for 2Q income of £2.4 billion and a loss of £318 million.
RBS or NatWest now, common equity Tier 1 ratio climbed to 17.2%, from 16.2% – one of the highest in the UK banking sector with a strong liquidity position and the excess ratio of 166%.
NatWest, formerly Royal Bank of Scotland (RBS) faces the same challenge with all UK banks and is how to make money in the low-interest rates environment and the discussion for negative interest rates. NatWest on July 22 changed the name from Royal Bank of Scotland (RBS) to NatWest and now trades as NWG tIcker in LSE.
RBS Technical Analysis
NatWest gives up 0.93% at 111.40 as the rebound from multiyear lows stalled at 114 after two day’s rebound. The technical picture has deteriorated the last two weeks after the RBS share breached below the 100-day moving average. Initial support for the share stands at 111.20 the daily low. A break below would challenge 103.45 the low from August 3.
On the other side, first resistance for NatWest share is at 113.75 today’s top. The next critical hurdle stands at 116.47 the 100-day moving average. A credible break above would cancel the recent bearish momentum and bulls might target 120.10 the 50-day moving average.