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NatWest is set to report its first-quarter earnings for 2021 on Friday, July 30. Last week, the bank announced its exit from Ireland by selling its assets to Permanent TSB (PTSB) in a deal where PTSB will acquire €7.6 billion worth of performing loans.
As part of this agreement, PTSB will take over 25 of Ulster Bank’s 88 branches, while NatWest will acquire a 20% equity stake in PTSB’s expanded share capital.
This sale strengthens NatWest’s capital position, and analysts are predicting that the bank might announce an accelerated share buyback during Friday’s earnings call. The bank is well-positioned to benefit from the Bank of England’s easing of restrictions on capital and earnings distribution to shareholders.
As the earnings report approaches, traders and investors will be paying close attention to growth in card issuances and usage. So, what are the potential scenarios for NatWest’s stock price?
A positive earnings report could enable NatWest to break above the key psychological level of 200.55, which also aligns with the lows from June 30 and July 7. This breakout could pave the way for the stock to reach 210.00, with further resistance at 214.50.
On the other hand, if the stock drops below the 195.00 level, which has acted as support on May 18, July 8, and July 26, it could allow the bears to push the price down to 187.30. A more significant decline could bring 180.30 into focus, with additional support levels at 173.65 and 167.75.