NatWest posted better-than-expected profits for the first three months of 2023, showing its resilience despite unease over Britain’s economic outlook amid persistent inflation.
NatWest reported first-quarter pre-tax profit of 1.8 billion pounds ($2.25 billion), above an average of 1.6 billion pounds of analyst forecasts compiled by the bank and higher than 1.2 billion pounds a year earlier.
Results from rival Barclays, which beat forecasts on Thursday, showed a rise in revenue from its consumer businesses as people spent more with credit cards in Britain and the US.
NatWest said it saw around £19.8bn of deposit outflows in the quarter, due to the sale of Ulster Bank, customers paying tax and competition from other banks for savers’ money.
Bank investors are wary of Britain’s stubbornly high inflation, which is straining household budgets and increasing the risk that borrowers will fall behind on loan repayments.
Higher prices increase the likelihood that Bank of England interest rates will remain high for longer, increasing borrowing costs and further reducing consumer purchasing power.
“By monitoring customer behavior and paying close attention to signs of financial distress, we can take proactive steps to help those struggling at this time,” said Alison Ross, chief executive of NatWest.
Although the state-owned bank released only a small portion of its cash reserves in the previous year, it has set aside 70 million pounds to cover possible loan repayments.
But NatWest said loan arrears were lower and charges were down from the £144m recorded in the previous quarter.
($1 = 0.8013 pounds)
“Food trailblazer. Passionate troublemaker. Coffee fanatic. General analyst. Certified creator. Lifelong music expert. Alcohol specialist.”