NatWest’s first-half pre-tax operating profit fell by a less than expected 16 per cent to £3 billion (€2.8 billion), it said on Friday, with margins hit by mortgage market competition and savers shifting deposits to higher-paying products.
The British bank also said it would buy a portfolio of prime residential mortgages from Metro Bank for £2.4 billion as it looks to build up its retail banking business.
In a sign of its confidence in its performance for the rest of the year, NatWest lifted its 2024 forecast for return on tangible equity to above 14 per cent, from the 12 per cent expected previously.
Income for the year is expected to reach about £14 billion, up from an earlier forecast of between £13 billion and £13.5 billion.
The results followed a similar update from rival Lloyds Banking Group on Thursday, which reported a 14 per cent fall in first-half profit but offered signs of optimism for the economic outlook in the second half.
“Our customers are beginning to feel more confident, with activity increasing and asset quality remaining strong, and we are well positioned to help unlock growth across the UK through our unrivalled regional network,” NatWest chief executive Paul Thwaite said on Friday.
The British bank said this month that the government’s stake in it fell below 20 per cent, moving the lender closer to full private ownership after its state bailout in the 2008 financial crisis. – PA
