NatWest Q3 Profits Up as Lending and Deposits Grow

NatWest Group, the UK-based retail and commercial bank serving over 19 million customers in different regions of the country, on Friday reported a profit of $1.52 billion and a return on tangible equity (RoTE) of 18.3% for the third quarter of 2024.

The total income excluding notable items of $4.89 billion was $236.17 million, which is 5.1%, higher than Q2 of 2024 primarily reflecting lending and deposit growth and margin expansion, the Group while releasing the financial results.

The Net interest margin (NIM) of 2.18% was 8 basis points higher and other operating expenses were $186.86 million lower than Q2 of 2024. The Net impairment charge were $317.92 million or 25 basis points of gross customer loans and the levels of default remained at low levels across the portfolio.

The Group also said that net loans to customers excluding central items increased by $10.9 billion in the quarter, of which $2.98 billion was in relation to the Metro Bank mortgage portfolio acquisition, with strong growth across the three businesses, including a $1.82 billion increase in mortgage balances.

Q3 Y-to-D Performance

The attributable profit was more than $4.24 billion and a RoTE of 17% and the total income excluding notable items of $13.98 billion was $157.01 million, or 1.1%, lower than prior year. NIM was 2.11% for the year to date.

Other operating expenses were $181.67 million, higher than the same period of 2023, or 0.7% higher excluding costs in relation to a retail share offering of $31.14 million and additional bank levies of $101.21 million.

Customer deposits excluding central items increased by $10.77 billion, including $5.19 billion of growth in retail banking and $2.6 billion in private banking, NatWest Group said.

NatWest Group Chief Executive Paul Thwaite said that the strength of the Group’s performance was underpinned by the support they provided to their 19 million customers in every nation and region of the UK.

As the UK’s biggest bank for business, NatWest Group plays a key role in driving economic growth across the UK. Throughout the third quarter of 2024, it has grown lending, helping customers to buy or re-mortgage their homes or to start and grow their businesses, he said.

“With customer activity increasing, defaults remaining low and optimism amongst businesses and consumers, we are well placed to succeed with our customers and for our shareholders in the months and years ahead,” Thwaite added.

Outlook

The Group continues to assess the economic outlook and will monitor and react to market conditions and refine its internal forecasts as the economic position evolves and expects to achieve a return on tangible equity above 15%.

The Group also expects income excluding notable items to be around $18.69 billion while the operating costs, excluding litigation and conduct costs, to be broadly stable compared with 2023 excluding around $130 million increase in bank levies and $31.14 million of costs in relation to a retail share offering.