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NatWest has posted its highest quarterly earnings since before its taxpayer bailout on the peak of the monetary disaster.
The UK bank upgraded its steering after a 30 per cent surge in third-quarter earnings, sending shares on Friday to their highest stage in 15 years.
NatWest generated £2.2bn in pre tax earnings for the three months to September on greater mortgage and company lending, in contrast with £1.7bn over the identical interval final yr and analyst expectations of £1.8bn.
The final time it generated such a revenue was within the third quarter of 2008, in accordance with the financial institution and historic monetary statements. The revenue got here simply as Lehman Brothers’ historic chapter roiled markets. However the UK lender went on to jot down down giant elements of its stability sheet. Royal Financial institution of Scotland, as NatWest was identified, was taken over by the UK authorities in October 2008.
NatWest only returned to full private ownership in May, when the federal government offered the final of the shares it acquired as a part of the £45.5bn bailout of the financial institution.
The banks mentioned on Friday whole revenue rose to £4.3bn within the three months to September in contrast with £3.7bn in the identical interval final yr. Within the second quarter, NatWest generated simply over £4bn in revenue.
The lender’s shares rose as a lot as 7 per cent to their highest stage since Might 2010, earlier than paring beneficial properties.
Its lending elevated by £4.4bn within the third quarter, together with a £1.7bn enhance in mortgage lending.
NatWest’s wealth enterprise, which incorporates the non-public financial institution Coutts, generated £284mn over the quarter in contrast with £252mn in the identical interval final yr.
The will increase allowed NatWest to improve its steering on revenue and return on tangible fairness (Rote) — a key profitability measure. It has raised its Rote goal from 16.5 to 18 per cent. Additionally it is aiming for £16.3bn in revenue in 2025, a rise from the £16bn it guided at half-year.
NatWest’s internet curiosity margin — the distinction between the speed it pays out on deposits and expenses for loans — rose to 2.37 per cent, in contrast with 2.28 per cent final quarter. Like all banks, NatWest has benefited from structural hedges that easy out the results of rate of interest fluctuations.
Regardless of the earnings enhance the financial institution mentioned buyer deposits fell £1.1bn within the quarter due to a discount in financial savings balances at its retail banking and wealth enterprise.
NatWest, a significant lender to UK companies, additionally put aside £153mn in provisions, decrease than the £190mn anticipated by analysts.
Regardless of financial uncertainty and inflation, UK banks say their prospects are in good monetary well being. On Thursday, Lloyds Banking Group raised its outlook for internet curiosity margin whereas its chief monetary officer reported that the UK economy was steady. On Wednesday, Barclays introduced a £500mn share buyback.
Chief government Paul Thwaite mentioned: “NatWest Group delivered one other robust efficiency within the third quarter of 2025, underpinned by wholesome ranges of buyer exercise . . . That is driving optimistic momentum throughout our three companies, with continued lending progress and deposits remaining steady.”
He has set three strategic objectives for the financial institution: simplifying its operations, “disciplined” progress and bettering threat administration.
Analysts have speculated that it’s set on a significant acquisition underneath non-public possession. It offered £11bn to buy the UK operations of Santander UK this yr and ran the rule over TSB, which was finally purchased by Santander.
Final yr, NatWest purchased nearly all of Sainsbury’s Financial institution and £2.5bn of prime residential mortgages from Metro Financial institution. Nevertheless, Thwaite has additionally mentioned any goal might want to meet a “excessive bar” for NatWest to go forward with a deal.
Thwaite mentioned on a media name that the financial institution was actively monitoring its publicity to the non-public credit score market within the wake of the bankruptcies of each First Manufacturers and Tricolor which have rippled throughout the non-public lending market. He mentioned NatWest had no publicity to both firm however that the financial institution had “lower than £5bn” value of lending to non-public credit score funds.
Further reporting by Ray Douglas in London
