NatWest profit leaps by a third as customers ‘resilient’ against uncertainty
Income was boosted by customer balances growing, higher lending and more trading activity.
NatWest has revealed its profit jumped by more than a third in recent months as the bank said its customers were “resilient” against “increased global economic uncertainty”.
The boss of the banking group said confidence had dropped among households and businesses but behaviour had not changed.
NatWest Group, which also incorporates Royal Bank of Scotland and Coutts, reported an operating pre-tax profit of £1.8 billion for the first three months of 2025.
This was 36% higher than the £1.3 billion made this time last year and exceeded the expectations of analysts for the quarter.
Income was boosted by customer balances growing, higher lending and more trading activity.
The amount of money deposited by customers increased by £2.1 billion during the quarter, including in current accounts, despite an upsurge in tax payments ahead of the new financial year.
Net loans surged by £3.4 billion, driven by mortgage and business lending as house buyers rushed to complete deals ahead of stamp duty relief being cut from April.
NatWest’s chief executive Paul Thwaite said the bank was expecting to report income at the “upper end” of its guidance for the full year.
“In the face of increased global economic uncertainty, our customers remain resilient and we saw good levels of activity through Q1 (first quarter) 2025,” he said.
Mr Thwaite nonetheless said it was a “mixed picture” in terms of confidence across the bank’s customer base.
“It is obvious that sentiment has dipped. We’re clear about that, you can see it in the surveys, that sentiment has dipped for both personal and business customers,” he said.
He said there were no “material changes in behaviour” among retail customers and that “spending is actually up on discretionary items”, while household savings and the mortgage market remained strong.
Data from the bank showed spending on areas like entertainment jumped 8% in the first quarter, compared with last year, while travel spending was up 5% and retail 4% higher, partly driven by more furniture and home decor shopping.
At the same time, essential spending on costs like groceries, utilities and fuel continued to decline over the start of the year.
However, Mr Thwaite said some business, particularly large corporations, were on “wait and see mode” amid rising uncertainty over Donald Trump’s tariffs and the impact on global trade.
NatWest said lending to companies that export to the US was about a “low single digit percentage” of its overall loan book, with most of its business customers operating in the services sector.
The bank said it was monitoring and would react to changing conditions, as US tariffs sent shockwaves across the financial markets last month and have raised concerns over the outlook for global economic growth.
The latest results come as the bank edges closer to privatisation, with the Government’s stake falling below 2% on Thursday.
NatWest has said it would be a “symbolic moment” when it returns to private ownership after being bailed out by taxpayers during the financial crisis in 2008 and 2009.
The Government’s shareholding is expected to have been fully sold by the middle of the year.
