NatWest Sees 27% Profit Drop Amid Mortgage Rate Decrease; US Regulator Halts Asset Managers’ Bank Stake Scrutiny Plans
NatWest, a British bank, has reported a 27% decrease in first-quarter profits, citing heightened competition in savings, mortgage, and lending products over the past year. The bank’s pre-tax operating profit fell to £1.3bn from £1.8bn in the previous quarter, aligning with analyst predictions. Despite the profit dip, revenues slightly exceeded market expectations, reaching £3.5bn.
The bank saw a slight uptick in net interest margin at the group level, rising from 1.99% to 2.05% compared to the previous quarter. However, within its retail banking arm, this margin dipped to 2.22% due to intensified competition in the mortgage market.
NatWest set aside £93mn for bad loan provisions, notably lower than the anticipated £186mn.
Equity analyst Matt Britzman from Hargreaves Lansdown praised NatWest’s performance, especially compared to industry peers Lloyds and Barclays.
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NatWest’s shares surged by over 31% since the year’s start, partly due to new leadership post a scandal involving Nigel Farage’s account closure at Coutts, NatWest’s private bank.
The UK government, NatWest’s major shareholder post the 2008 financial crisis bailout, reduced its stake below 30%, indicating a move towards private ownership. CEO Paul Thwaite expressed satisfaction, highlighting the bank’s shared goal of returning to private ownership for the benefit of shareholders and the bank itself.
The government is expected to decide on further share sales, potentially returning NatWest to full public ownership as soon as this summer.
