NatWest increased third-quarter income by 7.1 per cent to 4.640 billion pounds, while profit attributable to ordinary shareholders fell by 4.1 per cent. Credit impairment charges and tax expenses increased. Customer lending and deposits both expanded at NatWest during the quarter, and the British banking group retained its annual income outlook excluding notable items. NatWest continued to expand customer lending.
Economics & Markets··Evening
Interest income rises faster than total revenue
NatWest Group, the British banking group, generated income of 4.640 billion pounds in the third quarter, up 7.1 per cent from a year earlier. Net interest income grew by 8.9 per cent to 3.559 billion pounds; non-interest income rose by 1.6 per cent to 1.081 billion pounds. Operating profit before tax increased by 1.9 per cent to 2.225 billion pounds. Profit attributable to ordinary shareholders declined by 4.1 per cent to 1.532 billion pounds.[1]
In the quarterly results presentation, chief financial officer Katie Murray put return on tangible equity at 21.6 per cent. She reported a cost-income ratio of 45.1 per cent and an impairment charge of 277 million pounds. Basic earnings per ordinary share in the results statement were 19.3 pence.[1], [2]
Credit charges increase while provisions stay stable
Credit impairment losses had been 153 million pounds a year earlier and 140 million pounds in the second quarter. NatWest attributed the sequential increase to the absence of the previous quarter’s provision releases and higher charges on more impaired loans. Total expected credit-loss provisions remained at 3.6 billion pounds. The quarterly tax charge increased by 21.5 per cent annually to 610 million pounds.[1]
Net interest margin stood at 2.50 per cent, against 2.49 per cent in the preceding quarter and 2.37 per cent a year earlier. Murray said improvements in deposit margins were offset by mortgage repricing and changes in the mix of lending. She said annual income excluding notable items was still expected to be approximately 17.9 billion pounds.[1], [2]
Loans and deposits expand during the quarter
Customer lending excluding central items increased by 8.1 billion pounds to 414.3 billion pounds, while deposits on the same basis rose by 5.8 billion pounds to 453.4 billion pounds. Assets under management and administration reached 132.4 billion pounds. The common equity tier one ratio, a measure of core bank capital, rose by 30 basis points to 13.5 per cent. Average liquidity coverage was 137 per cent. Nine-month profit attributable to ordinary shareholders totalled 4.567 billion pounds.[1], [2]
