The NatWest share price slumped on Thursday even after the company announced strong quarterly results. The shares of the bank, formerly known as Royal Bank of Scotland, declined by more than 4% to 195 pence.
NatWest news: In the past few weeks, we have received impressive results from some of the leading banks in the world like Bank of America, Goldman Sachs, and JP Morgan. On Tuesday, HSBC was the first UK bank to publish its results followed by Lloyds Bank yesterday.
A common theme has emerged, as I wrote about a few months ago. All these banks have announced major profits as they shifted funds from last year’s provisions.
The same story happened today when NatWest reported its results. The bank said that its operating profit rose to 946 million pounds, better than the 519 million pounds that it reported in the previous year. The profits were also better than the expected 536 million pounds that analysts were expecting.
The NatWest share price declined partly because of the ongoing money laundering case being conducted by the FCA. They allege that the bank failed to detect deposits worth more than 365 million pounds in five years. The case will start on May 26 and could lead to a substantial fine.
NatWest is mostly owned by the UK government, which bailed it out in 2009 amid the financial crisis. Recently though, it has bought some of the shares from the government.
On the daily chart below, we see that the NatWest share price has been in a strong upward trend recently. It has jumped by more than 115% from its lowest level in October last tear. Recently, the stock has formed an ascending channel that is shown in black. Today, the shares moved close to the lower side of the channel.
It is also attempting to move below the 23.6% Fibonacci retracement level. Therefore, in my view, it is clear that the upward momentum has started to wane. Therefore, while it is difficult to tell, we cannot rule out a situation where the stock declines to 180p, which is the 23.6% Fibonacci retracement level as the case starts.
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