What happened

Shares of NatWest Group (NWG -0.75%), the parent company of the Royal Bank of Scotland, traded close to 8.7% down in the final hour of trading today after the bank reported earnings results for the third quarter of the year.

So what

NatWest reported net income of about $217 million in the third quarter on total revenue of about $3.7 billion, numbers that came in below analyst expectations for the quarter.

"At a time of increased economic uncertainty, we are acutely aware of the challenges that people, families and businesses are facing up and down the country," NatWest's CEO Alison Rose said in an earnings statement.

Rose added: "Although we are not yet seeing signs of heightened financial distress, we are very conscious of the growing concerns of our customers and we are closely monitoring any changes to their finances or behaviours."

NatWest took a provision for loan losses of nearly $287 million as loan losses grew in the quarter, which is up significantly from last quarter. Operating expenses also rose to about $2.2 billion in the third quarter, up about 3.4% from the previous quarter, which seemed to concern analysts.

"The market is likely to need more clarity on the costs trajectory given this is the second quarter management have walked back the cost guidance," Jefferies analyst Joseph Dickerson said, according to Bloomberg.

Now what

NatWest Group did change the composition of its outlook for next year, but still plans to generate a return on tangible equity between 14% and 16%.

Investors may be nervous to see management shifting things around, but if the bank can achieve these returns, the stock should perform well because NatWest currently trades at just 65% of its tangible book value, or net worth.