NatWest Sees 36.2% Boost in Profits as it Nears Full Reprivatization

NatWest, formerly known as Royal Bank of Scotland, has reported a significant increase in profits, jumping to £1.8 billion in the first quarter, a 36.2% rise from the previous year. This comes as the bank is on the brink of full reprivatization, with the government's stake in the lender expected to drop to zero within the next month. The bank's chief executive, Paul Thwaite, attributed the growth to an increase in lending and better margins on deposits, despite setting aside a net £189 million for potential bad loans.

Key Takeaways:

• NatWest's pre-tax profits have increased by 36.2% to £1.8 billion in the first quarter, surpassing the £1.6 billion forecast by City analysts.
• The bank has set aside a net £189 million for potential bad loans, up from £93 million a year earlier.
• 70% of NatWest's corporate credit exposure is to the services sector, which is not directly affected by tariffs.
• Manufacturing, which is at the centre of the trade war, only represents about 2% of the group loan book.
• Customers who exported to the US accounted for a "low single digit-percentage" of NatWest's overall lending and assets.
• The bank's finance chief, Katie Murray, has decided not to reverse previously booked loan loss provisions, citing economic uncertainty.
• NatWest's chief executive, Paul Thwaite, is calling on the government to consider scrapping ring-fencing rules, introduced after the 2008 financial crisis.

Statistics:

• £1.8 billion: NatWest's pre-tax profits in the first quarter.
• £189 million: Net provision for potential bad loans, up from £93 million a year earlier.
• 65.5 billion: PS45.5 billion - the size of the taxpayer bailout in 2008.
• 1.98%: The government's current stake in NatWest.
• 70%: The proportion of corporate credit exposure in the services sector, which is not directly affected by tariffs.
• 2%: The proportion of the group loan book represented by manufacturing, which is at the centre of the trade war.
• 1.3%: The increase in NatWest shares on the news, closing at 482p.

Sources:

• "NatWest, led by Paul Thwaite, sets aside £189m for bad loans as pre-tax profits rise 36.2% to £1.8bn" - FT (no date).
• "The Treasury's stake in NatWest is set to drop to 1.98% after the government sold more shares" - The Telegraph (no date).
• "NatWest says it has seen no significant changes in behaviour from households and consumers despite economic uncertainty" - BBC News (no date).
• "Paul Thwaite, NatWest CEO, says the bank has been shielded from the worst of the trade turmoil" - City A.M. (no date).