Decline in income partly attributed to high central bank rate
NatWest has reported a 27% decrease in profit during the first quarter of the year, posting a pretax operating profit of £1.3 billion, down from £1.8 billion in the previous year.
Though the latest quarterly figure was down compared to the £1.8 billion recorded during the same period of the previous year, the decline was less severe than anticipated, with the average of analyst forecasts standing at £1.2 billion.
The drop in income was attributed to lower deposit balances and a shift by customers to higher-returning savings products, compounded by rising interest rates over the past couple of years.
Net loans to customers, excluding central items, rose by £1.4 billion, or 0.4%, in the quarter, reaching £357 billion with growth in corporate and institutions, which was partially offset by a rise in mortgage redemptions within retail banking during the period.
Impairments, a key indicator of loan losses, were reported at £93 million for the quarter – significantly lower than the £186 million forecasted by analysts.
We’ve released our Q1 2024 Results.
— NatWest Group (@NatWestGroup) April 26, 2024
See our key numbers and find out more here: https://t.co/t8v7M4cNFd#NatWestGroupResults pic.twitter.com/RBGzIHrerx
“We remain focused on the priorities we set out in February, which will help us shape the future of this bank,” Paul Thwaite, chief executive of NatWest Group, commented on the results. “Our performance is grounded in the vital role we play in the economy and in the lives of our 19 million customers.
“Though macro-uncertainty continues, customer confidence and activity is improving, with both lending and deposits up in the quarter and impairments remaining low, reflecting our well-diversified business.”
Thwaite said the bank remains ambitious and that its first priority is to deliver disciplined growth across its three businesses through better customer service while striving to become simpler, more productive, and easier to deal with.
“We aim to generate returns that allow us to support our customers, invest in our business and deliver attractive distributions to shareholders,” he added.
“We are also pleased with the recent momentum in the reduction of HM Treasury’s stake in the bank. Returning NatWest Group to private ownership is a shared ambition, and we believe it is in the best interests of both the bank and all our shareholders.”
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