SAC 25 Final National, Regional & Local Angel Group Investing Insights 2024 0...
Comps Analysis
1. Eva Dhimitri, Student ID:20030008,
Yurgues Da Silva Pereira Duarte, Student
ID:20033933
Kinjal Rameshbhai, Student ID:21022080
The Guildhall Schoolof Business and Law
FE7062Commercial and Investment Banking
Natwest Group Plc UK
Module leader :
Dr.Jonida Carungu & Dr. Shahbano Khan
2. Introduction
2
Analysis of the target company's data, the NatWest Group Plc (2018-2020).
An overview of the business and financial profile.
Examination of the bank financial analysis data by comparing it with Lloyds
Bank Plc and Metro bank Plc (2018-2020).
The Overall conclusion based on the banks performance for the given period.
3. National Westminster Bank/
NatWest Group Plc is :
• The major retail and commercial
bank in the United Kingdom.
• Founded in 1968 by the unification
of National Provincial Bank and
Westminster Bank.
Structure: NatWest Group Plc
performs globally through its four
principal branches:
• NatWest Holdings
• The Royal Bank of Scotland,
• National Westminster Bank
• Ulster Bank Ireland DAC.
3
4. BUSINESS PROFILE cont.
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(NatWest, 2021)
Financial
Products and
services:
Retail Banking
Commercial banking
Investment banking
Insurance services
Distribution Channels : It has a great network of over 960 branches and 3,400
cash machines across United Kingdom and provides 24-hour Action line
telephone and online banking services.
Costumers and end markets: It has around 7.5 million personal customers and
850,000 small business accounts.
Today: NatWest is evaluated as one of the Big Four clearing banks in the UK.
5. 5
The two charts below show an overview
of earning trends based on comparable
company analysis. In both charts from
2018 to 2020 is illustrated a downward
trend in market valuation.
Comparable Revenue EM
Comparable Earnings per share
(Bloomberg , 2021)
As an investor, it is necessary the
view of some critical indicators and
evaluate if the NatWest Group Plc is
suitable to be accepted or rejected
based on main FINANCIAL KEY
CHARACTERISTICS such as:
Bank’s Size
Profitability
Growth
Return on asset
Credit Profile
8. COMPS SELECTION CRITERIA
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From the perspective of Business Profile
• Operate on banking industry
• Are Retail and commercial banks located in the United
Kingdom
• Identical financial products and services, distributions
channels and costumers and end markets.
From the perspective of Financial profile
• Similar to size, between £1B and £50 Billion
• Similar growth rate, profitability and capital structure.
(Lloyds Group, 2021)
(Metro Bank 2021)
11. Conclusion
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To conclude, after analysing the key indicators, the suggested bank to invest is
Lloyds Group due to efficiency and the profitable profile. Moreover, it shows a
positive outlook of the profitability ratios. In general, the financial data presents a
relatively stable trend.
Regarding credit profile, Metro Bank all the given period 2018-2020 ranked in
the lowest level. Its credit rated as highly speculative. In 2019 and 2020 the
bank profitability ratios decreased dramatically.
Although the strong competitors, NatWest group retain a trustworthy bank to
invest. While, there is a mitigation in the key financial ratios, it remains well
diversified geographically and by business line.
In addition in 2020, year when Covid-19 and Brexit brought new challenges to
the banking industry, it is to be appreciated that the NatWest Group ratios have
been stable, with no drastic changes in comparison with Lloyd's group and
Metro bank key financial ratios.
However, it should be noted that there may be some limitation using this
comparable companies analysis, such as : the banks are not exactly the same
and the companies available data may not be accurate.
