NatWest ups targets as Q3 profits jump by a third

NatWest has raised its full-year income forecasts after a strong third quarter, in which profits jumped by 35.3% on last year.

The banking group said attributable profit for the three months to 30 September totalled £1.17bn, up from £866m, on the back of lending and deposit growth combined with an 8-basis point improvement in the net interest margin to 2.18% Total income rose 7.3% to £3.77bn.

The company provided net loans to customers (excluding central items) of £363.7bn during the quarter, up £8.4bn or 2.4% over the second quarter, driven by "broad-based" growth across retail banking, commercial and institutional customers and including £2.3bn taken over from the acquisition of the Metro Bank mortgage portfolio.

Meanwhile, customers deposits (excluding central items) increased by £2.2bn to £427.4bn.

Meanwhile, return on tangible equity was 18.3% in the third quarter, down from 18.5% in the second but up sharply from 14.7% a year earlier.

NatWest said it now expects to achieve a return on tangible equity above 15%, up one percentage point on previous guidance, while adjusted income should come in at £14.4bn, compared with an earlier forecast of £14bn.

"Throughout the third quarter of 2024, we have grown our lending, helping customers to buy or remortgage their homes or to start and grow their businesses," said chief executive Paul Thwaite.

"With customer activity increasing, defaults remaining low and optimism amongst businesses and consumers, we are well placed to succeed with our customers and for our shareholders in the months and years ahead."