NatWest has today reported flat third-quarter profit compared to the same time last year, as it grew lending while maintaining deposit margins in the face of increasing competition.
The British bank like rivals HSBC and Lloyds reaffirmed its performance targets for the year, rather than upgrading them as some had hoped, in a sign of how the UK’s lenders are facing a tougher economic outlook and increasing competition for savers’ money.
NatWest reported pretax operating profit for the July-September period of £2.2 billion, in line with the average analyst forecast.
Cost-income ratio was 45.7% for the year to date, 2.1 percentage points lower than the previous year on gross cost savings of around £420 as the bank cuts jobs and invests in AI.
The bank said that assets in its wealth business grew by £1 billion in the quarter following the Evelyn partners acquisition.
“We continue to see broad-based growth in our three customer franchises, with lending, deposits and assets under management all increasing during the quarter”, CEO Paul Thwaite said.
Jefferies analyst Jonathan Pierce said this quarter shows British banks “tearing off the band aid” by lowering investors’ expectations for interest income growth, as margin pressures intensify.
