NatWest Bank says its pre-tax profits soared by 82% to £946m over the three months to March. That compares with £519m a year earlier, when profits were halved due to a larger-than-expected £800m Covid loan loss provision.
The bank easily beat average City forecasts that anticipated profits of £536m for the first quarter.
Go deeper with GlobalData
CEO Alison Rose, Chief Executive Officer, commented:
“NatWest Group’s profit in the first quarter of 2021 is a result of a good operating performance in our core franchises as well as modest impairment releases that reflect the better-than-expected performance of our loan book across the first three months of the year.”
Customer deposits increased by £21.6bn
However, income across the UK and RBSI retail and commercial businesses decreased by £203 million, or 8.0%, compared with Q1 2020.
This “reflects the lower yield curve, subdued transactional business activity and lower consumer spending, partially offset by balance sheet growth,” the bank noted.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataRBS International (RBI) is one of NatWest’s four brands. Under the RBSI brand, the bank offers a full range of services to corporate and markets customers.
Net lending also decreased by £1.8bn to £358.7bn comparison to Q4 2020. Across the UK and RBSI retail and commercial businesses, net lending excluding UK Government support schemes, increased by £2.2 billion, or 3.0% on an annualised basis, including £3.4 billion related to mortgages.
Retail Banking gross new mortgage lending was £9.6 billion in the quarter. At the same time, customer deposits increased by £21.6bn compared with Q4 2020 to £453.3bn.
Across the UK and RBSI retail and commercial businesses customer deposits increased by £12.1 billion, or 3.0%, as customers sought to retain liquidity and reduced spending.
The economic outlook remains uncertain
The group retains the outlook guidance provided in the 2020 Annual Results document. The economic outlook remains uncertain in an ongoing pandemic, NatWest said then.
“We expect NatWest Group to generate a return of tangible equity of between nine percent and ten percent by 2023,” the CEO wrote in the last annual report.
“The key drivers behind this are, first, growth. While we expect income to be slightly down in 2021, we are targeting above market rate lending growth across our UK and RBS international retail and commercial businesses through to 2023.
“And we expect support from a normalisation of customer activity as we exit lockdown and as the economy recovers.”
