RBS owner NatWest posts £2 billion profit but warns over slowing UK economy
The group’s Q1 results came as Santander UK completed its near-£3bn takeover of smaller rival TSB.
Royal Bank of Scotland parent NatWest Group has cheered a first-quarter profit of £2 billion but cautioned over a worsening outlook for the UK economy.
The banking group, which also includes Coutts, reported an operating pre-tax profit of £2bn for the first three months of the year. This was up on the £1.8bn it made over the same period a year earlier.
Like other high street lenders, NatWest expects to be bolstered by interest rates staying higher for longer, meaning it can generate more from loans.
Nevertheless, the group revealed it had set aside more cash for bad loans after updating its forecasts for the UK economy, recognising that rising energy prices caused by the Middle East conflict had weakened the outlook.
NatWest said it was now expecting UK economic growth to slow, inflation to rise to around 3.5 per cent, and the unemployment rate to increase to peak higher than 5.7 per cent, while interest rates are held at their current level for longer.
Chief executive Paul Thwaite said: “We have started the year with positive momentum, underpinned by healthy customer activity - growing all of our three businesses, expanding our capabilities to meet more of our customers’ needs and further improving productivity as we use AI at scale across the bank.”
Nick Sherrard, managing director of Edinburgh-based consultancy Label Sessions, noted: “This is the first quarterly read on a fully private NatWest. If today’s results are indicative of what’s to come, then the bank has a bright future ahead of it.”
Meanwhile, Santander UK has completed its near-£3bn takeover of smaller rival TSB in what it said marks the single biggest investment in Britain’s banking sector for more than 15 years.
Spanish-owned Santander said the deal went through this week after recently securing the green light from regulators in the UK and Europe.
The banking giant, which is owned by Banco Santander, said there would be no immediate change for customers of Santander or Scottish-founded TSB, who can continue using their accounts and cards in the same way.
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