1st May 2026 08:36
(Alliance News) - NatWest Group PLC on Friday reported double-digit profit growth in the first three months of the year, though shares were held back by a more cautious than expected top-line outlook.
NatWest shares were down 3.7% to 563.38 pence each in London on Friday morning. The wider FTSE 100 index was down just 0.4%.
The Edinburgh-based lender said pretax profit in the first quarter of 2026 rose 12% to GBP2.03 billion from GBP1.81 billion a year before. Total income increased 9.5% to GBP4.36 billion from GBP3.98 billion.
Excluding "notable items", total income rose 6.9% year-on-year to GBP4.22 billion from GBP3.95 billion.
"NatWest Group's strong performance in the first quarter of 2026 reflects our consistent delivery for customers and shareholders," Chief Executive Paul Thwaite commented.
"We have started the year with positive momentum, underpinned by healthy customer activity growing all of our three businesses, expanding our capabilities to meet more of our customers' needs and further improving productivity as we use AI at scale across the bank."
Net interest income was 12% higher than a year prior at GBP3.39 billion, with the net interest margin improving to 2.47% from 2.27%.
NatWest reported a return on tangible equity of 18.2%, down from 18.5% a year prior.
NatWest upped its total income guidance for 2026. It now expects income excluding notable items at the top end of its GBP17.2 billion to GBP17.6 billion range, which at best would represent a 7.3% rise from GBP16.40 billion in 2025. However, an outcome of GBP17.96 billion had been expected by the market, according to company-compiled consensus.
All other guidance is unchanged from February, so NatWest still expects an RoTE of "greater than 17%" for 2026, before rising to 18% in 2028. The RoTE was 19.2% in 2025.
"Having raised our ambitions in February 2026, we have continued to make good progress against our strategic priorities in Q1 2026. We have started the year with positive momentum, underpinned by healthy customer activity - growing all of our three businesses, expanding our capabilities to meet more of our customers' needs and further improving productivity as we use AI at scale across the bank," CEO Thwaite said.
NatWest said customer deposits rose by GBP3.1 billion during the quarter, "with growth in Corporate & Institutions" being partially offset by falls in Retail Banking and Private Banking & Wealth Management, both hit by seasonal tax payments.
The bank added: "Strong lending and deposit growth was partially offset by a GBP1.8 billion reduction in assets under management and administration, impacted by negative market movements. AUM net inflows of GBP900 million in the quarter were strong, with [around] 23,000 people investing with us for the first time."
In addition, NatWest said it generated over GBP100 million of additional cost savings in the first quarter.
"This has been driven by ongoing restructuring and increased investment, building on our strong technology foundation and accelerating our use of AI to deliver simpler and better customer experiences in a responsible way. We continued to support our customers with improvements to our digital journeys to meet their needs faster and more effectively," the company said.
NatWest"continued to actively manage lower returning capital to create capacity for redeployment", saying its "active balance sheet management" creates the room for shareholder returns.
It booked impairment losses of GBP283 million in the quarter, up from GBP189 million a year prior and GBP136 million in the final quarter. The sum includes a "multiple economic scenario update" of some GBP140 million.
By Eric Cunha, Alliance News news editor
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