NatWest shares are down about 3% at 614.6p, against a prior close of 635p, even though analysts at UBS say the bank's third-quarter results were broadly in line.
UBS, which rates the stock a Buy with a price target of 835p, put profit before tax, excluding legal costs and one-off items, at £2.22 billion.
That was 2% below what the market expected. The shortfall came from income.
The bank earned less than forecast from the gap between what it charges borrowers and pays savers, known as net interest income.
Part of that was a £35 million charge after a review of how quickly customers repay mortgages and credit cards.
NatWest also set aside £277 million for loans that might not be repaid, 18% more than analysts expected.
Costs flattered the picture, coming in 3% below forecast.
UBS says that without that saving, profit would have missed expectations by 4%.
Capital
There was good news on capital, the financial cushion banks must hold against losses.
Its main measure of strength, the common equity tier 1 ratio, came in at 13.5%, slightly ahead of forecasts.
NatWest also said the assets it must hold capital against would be around £210 billion on 1 January 2027, below the £214 billion analysts expected.
UBS says that is worth about £500 million of extra capital, or 1% of the bank's stock market value.
A cut in an extra capital requirement set by the regulator is worth about £1 billion, or 2%.
2028 targets
The likely reason for the share fall is the targets for 2028.
NatWest aims for a return on tangible equity, a measure of profit relative to shareholders' capital, of above 18%.
Analysts had expected 21.2%.
It also targets costs of less than 45% of income, against the 43.6% analysts forecast.
The bank plans to restart share buybacks at its full-year results, with analysts expecting around £470 million.
What to watch
UBS said the call with management would need to address competition for customers and pressure on lending margins.
HSBC and Lloyds have both made more cautious comments.
UBS also noted that more customers are putting money into fixed-term accounts, which usually pay more interest.
It thinks the shares look cheap, at 7.2 times expected 2028 earnings against 8.4 times for the banking sector.
