NatWest Q1 profits rise on higher interest rates, income
By Frank Prenesti
Date: Friday 29 Apr 2022
(Sharecast News) - NatWest Bank on Friday reported soaring first quarter profit driven by a rise in interest rates and income.
The state-backed bank said pre-tax profits for the three months to March 31 rose 41% to £1.2bn, up from £885m the previous year, and ahead of the £755m average of analyst forecasts compiled by the bank.
However, chief executive Alison Rose said she was "very aware of the challenges and concerns the cost-of-living crisis is causing" as the banking sector braces for the impact of higher inflation and the Ukraine war.
NatWest's core capital ratio fell to 15.2% from 18.2% last year.
Total income for the three months rose 16.8% to £3bn, driven by strong growth in its mortgage division and favourable movements in the bond market.
Retail banking also improved as consumer spending levels recovered following the end of Covid restrictions, and there were higher levels of transactional banking fees.
Mortgages increased by 1.5% compared to the final quarter of 2021 to £2.7bn and customer deposits rose £800m quarter on quarter.
The bank also released £38m of cash held back during the Covid crisis, a divergence from rivals Lloyds and Barclays, which both made higher provisions for loan defaults in light of the cost of living crisis in the first quarter as inflation hit 7% last month.
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