NatWest Q1 Pre-Tax Profits Up 12% to £2 Billion

NatWest Group reported first-quarter pre-tax profits of £2 billion on Friday, a 12 percent increase from £1.8 billion a year earlier, surpassing analyst expectations, though the lender cautioned about a deteriorating UK economic outlook amid the Middle East conflict.

The banking group, which operates brands including Royal Bank of Scotland and Coutts, generated £4.4 billion in revenues, up from the prior year and ahead of forecasts of £4.3 billion. Its net interest margin, the gap between lending income and deposit costs, improved to 2.47 percent from 2.27 percent. Lending grew across retail, commercial and institutional segments, with mortgage balances rising by £3.3 billion and customer deposits increasing. The bank also achieved more than £100 million in additional cost savings while expanding AI use for productivity.

NatWest raised its full-year income guidance to the top of its £17.2 billion to £17.6 billion range, citing sustained benefits from interest rates remaining higher for longer. The Bank of England held its base rate at 3.75 percent on Thursday but indicated potential increases to counter inflation pressures from the conflict.

Despite the profit surge, NatWest more...