NatWest Group has revealed its first quarter profit rose by 36% – as the British lender prepares to return fully to private ownership for the first time since its 2008 financial crisis bailout.
The high-street lender delivered £1.8bn in operating profit before tax, beating market forecasts of £1.6bn.
The results come as the government’s stake in NatWest fell below 2% on Thursday, having reduced its shareholding from nearly 40% in December 2023 – described as an “inflection point” by the bank’s boss.
NatWest’s return on tangible equity – a key measure of banking profitability – reached a robust 18.5%, prompting executives to revise guidance upward for the full year.
The company also saw fuller margins on its deposits and higher trading returns.
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Chief executive Paul Thwaite confirmed the bank now anticipates hitting “the upper end” of its previously announced targets for both income and returns.
“Our strong first quarter performance demonstrates the positive momentum in our business as we deliver against clear strategic priorities,” Mr Thwaite said.
NatWest’s net interest margin (NIM) improved to 2.2%, an increase of 8 basis points from the previous quarter, reflecting deposit margin expansion.
Meanwhile, operating expenses were 8.5% lower than the final quarter of 2024, and 4.6% lower than the same period last year, reflecting seasonally higher costs in Q4 2024 and NatWest’s ongoing business transformation.
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The results showcase the turnaround of an institution once requiring a £45bn taxpayer rescue during the 2008 financial crisis.
NatWest’s UK-focused strategy has insulated it from the international market volatility triggered by recent American trade policies, a challenge affecting more international competitors.
Total income reached £3.95bn, while loan impairments remained modest at £189m, suggesting stable credit quality across the customer base.
Financial analysts viewed these results as validation of NatWest’s strategy, as it pivots between post-crisis recovery and forward-looking growth initiatives.
