NatWest profit tops forecasts, Wood Group flags some Q4 weakness
By Josh White
Date: Friday 14 Feb 2025
(Sharecast News) - London open
The FTSE 100 is expected to open seven points higher on Friday, having closed down 0.49% on Thursday at 8,764.72.
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Annual profit at UK bank NatWest just beat expectations as operating costs and tight margins weighed on earnings. Pretax operating profit rose 0.3% to £6.2bn in the 12 months to December 31 compared with estimates of £6.1bn. Net interest margin - the difference between loan and savings rates - was 1 basis point higher at 2.13%. NatWest said it expected to achieve a return on tangible equity in the range of 15-16% this year.
Wood Group flagged full-year adjusted EBITDA of $450m to $460m and adjusted EBIT of $205m to $215m in an update on Friday, saying it was actively managing costs and working capital to offset weaker-than-expected fourth quarter trading. The FTSE 250 noted that the ongoing independent review was expected to lead to prior year adjustments related to the projects business unit, but was not anticipated to materially impact its cash position. It projected double-digit profit growth in 2025, but was now expecting negative free cash flow of $150m to $200m, with planned asset disposals to maintain debt levels.
Newspaper round-up
The UK government will "wait and see" whether tariffs announced by Donald Trump "actually come to pass", a senior minister said. The US president announced what he called "reciprocal tariffs" on all other countries on Thursday evening, claiming it was "fair to all". But it was unclear how this would apply to the UK, especially as Trump suggested his policy regarded VAT as a tariff. - Guardian
The world's electricity use will grow every year by more than the amount consumed annually by Japan because of a surge in electric transport, air conditioning and datacentres, according to the world's energy watchdog. The International Energy Agency has raised its predictions for the world's rising demand for electricity, pegging the growth at almost 4% a year until 2027, up from its previous forecast of 3.4% a year. - Guardian
Barclays is under investigation for potentially breaking anti-money laundering rules in a fresh setback for the bank. On Thursday, the bank said the Financial Conduct Authority (FCA) was examining whether financial controls at its UK division had been too lax and if the lender had broken anti-money laundering laws. - Telegraph
The activist investor that has amassed a £4 billion position in BP is pushing for the British oil giant to emulate Shell's strategy in cost-cutting and ditching green investments. The famously aggressive New York hedge fund Elliott Investment Management is understood to want Murray Auchincloss, BP's chief executive, to follow the lead of Wael Sawan, his counterpart at Shell, who is leading a "ruthless" charge for higher returns and greater efficiency. - The Times
JP Morgan has run out of desks for its London staff despite ordering them back into the office five days a week. The US investment bank is trying to increase its desk space to accommodate all of its 14,000 London-based staff in Canary Wharf and the City. The return of JP Morgan employees back to their desks was triggered by the bank ending its flexible working arrangements, which previously allowed all staff, excluding senior management, to work from home three days a week, The Telegraph reported. - The Times
US close
US stocks rose strongly on Thursday as concerns about the immediate launch of reciprocal trade tariffs eased following comments from Donald Trump.
The Dow gained 0.8%, the S&P 500 jumped 1% while the Nasdaq rose 1.5%, with all three indices now trading within a whisker of their record highs.
Trump signed a memo to order federal agencies to look at how to match US tariffs to existing levies by other countries, stopping short of actually imposing any additional duties immediately, contrasting what he had promised earlier in the week.
Instead, the reports by the Commerce Department and the US trade representative are expected to be delivered by April 1, easing concerns - at least temporarily - of an escalation in the ongoing trade war.
"Trump's announcement of more tariffs failed to have much of an impact [...] since they are delayed until the beginning of April.
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