Natwest has exceeded analysts' profit expectations for the first quarter, thanks to market volatility and a rush to beat the stamp duty deadline. The FTSE 100 banking giant reported a pre-tax profit of £1.8bn, surpassing the £1.6bn predicted by analysts.
The bank's shares saw an increase of over three per cent during early trading on Friday. Total income rose by 3.8 per cent to £4bn, as reported by .
Net loans to customers, excluding central items, increased by £3.4bn to £371.9bn, driven by a surge in mortgage lending as Brits rushed to beat the March 31 deadline.
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Chancellor Rachel Reeves altered zero rate thresholds for main residences, which dropped from £250k to £125k with first-time homebuyer thresholds dropping from £425k to £300k.
The bank's net interest margin, a key measure of a bank's profitability from lending, expanded eight basis points from the end of 2024 to 2.27 per cent.
Trading income for the firm increased by £218m from the fourth quarter of 2024, reaching £284m, largely due to geopolitical tensions triggered by President Donald Trump's bombastic rhetoric.
Market sell-offs were triggered by Trump after recession fears spooked investors.
Natwest gained £56m in commercial and institutional revenue, 2.7 per cent higher than the fourth quarter of 2024, which the bank attributed to strong customer activity in markets.
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NatWest Group has reported an 8.5 percent reduction in operating expenses to £2bn, attributing the decrease to "seasonally high costs" from the previous quarter, with a notable £93m saving from Q1 of 2024.
John Moore of RBC Brewin Dolphin commented on NatWest's performance by stating: "Natwest's recent success has been built on cutting costs, simplicity, and keeping its capital base tight, providing it with a strong balance sheet and solid foundation to build on."
He also added: "With some of its peers potentially retreating from the 海角视频, that may open up opportunities for acquisition or other forms of expansion, which would provide further scale while sticking to the three pillars of the bank's strategy."
Natwest ups provisions after economic turmoil
The banking giant joined its FTSE 100 counterparts HSBC, Barclays, and Lloyds in bolstering provisions amidst economic volatility, increasing expected credit loss by £100m to £3.5bn, while noting: "We retain post model adjustments of £0.3bn related to economic uncertainty, or 8.7 per cent of total impairment provisions."
Looking ahead, NatWest has raised its outlook for 2025, anticipating revenue at the higher end of its initial £15.2bn to £15.7bn forecast, along with a return on tangible equity also projected at the upper spectrum of their 15 to 16 percent target.
As the government continues to reduce its stake, NatWest is on course for a full transition to private ownership in the near future.
Paul Thwaite, NatWest's chief executive, commented on the bank's performance: "In the face of increased global economic uncertainty, our customers remain resilient and we saw good levels of activity through Q1 2025."
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He also noted the firm's capacity to support stakeholders: "The strength of our balance sheet means we are well placed to help our customers navigate any challenges, whilst also investing in our business and delivering returns to shareholders."
Thwaite highlighted the role of his company during economic growth efforts: "At a time when there is a clear intent to deliver economic growth, NatWest Group is able to play an important role, shaping our future as a vital and trusted partner to our customers and to the 海角视频 itself."