NatWest profits jump 20%, hit highest level since 2007


High interest rates significantly impacted the housing and mortgage market in 2023, the bank says

NatWest posted annual pre-tax profits that jumped 20% to £6.2 billion due to high interest rates, its highest profit since 2007.

The high street bank says: Retail banking mortgage lending rose by £5.9 billion, with gross new mortgage lending of £29.8 billion in 2023 compared with £41.4 billion in 2022, reflecting the smaller mortgage market.

The bank says: High interest rates significantly impacted the housing and mortgage market in 2023.

The BoE base rate is presently at a 16-year high of 5.25% as the central bank battles inflation at 4%.

Nevertheless, higher interest rates served to lift NatWest’s revenues and saw its net interest margin – the difference between what it takes in from borrowers and what it pays to savers – increase by 19 bps to 3.04% compared to a year ago.

Personal lending grew as a result of strong demand across both mortgages and unsecured lending, although mortgage demand dropped during the second half of the year in line with trends in the UK mortgage market, the bank notes in a stock market statement.

The group – which includes Royal Bank of Scotland, Ulster Bank and Coutts — named Paul Thwaite as its permanent chief executive.

He succeeds Dame Alison Rose who resigned in 2023 in the wake of the Nigel Farage bank account scandal.

Thwaite says: This year we are focused on the things we can control — delivering profitable growth, becoming more efficient, more productive, and simpler to deal with, while managing our cost and capital efficiently.

The bank is preparing for a potential sale of its shares to the general public, which reports indicate may come in June.

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