In the three months from July to September, mortgage applications increased by more than 90 per cent compared to quarter two when lockdown restrictions between March and June froze the housing market.
Strong levels of mortgage lending in quarter one and quarter three has driven the bank’s balance sheet growth since the 2019 year end.
The bank’s total income was £2.4bn, a decrease of £202m compared to Q3 2019 due to diluted mortgage margins, less fee income generated from overdraft use, lower deposit returns and fee income from customers spending money abroad.
Margins on new mortgage business and switching transactions that completed in Q3 were approximately 140 basis points which the bank said was in line with its overall book margin.
Margins on new mortgage business placed in Q3 were around 160 basis points, as spreads in the market continue to widen.
NatWest helped an estimated 250,000 customers with an initial mortgage payment holiday and provided payment holidays on over 82,000 business customer accounts.
As at 30 September, there were 37,000 active mortgage repayment holidays and approximately 55,000 active payment holidays on business customer accounts.
It approved £13bn through the government’s various lending initiatives.
NatWest made a pre-tax profit of £355m, beating market forecasts of a £75m loss. The bank’s fortunes were boosted by a lower than expected impairment charge of £254m. The bank had previously forecast impairment losses of £628m.
Further, it has introduced a new target to have three per cent black colleagues in senior UK roles by 2025, after previously committing to a target of at least 14 per cent BAME representation in senior UK roles by 2025.
Chief executive Alison Rose (pictured) said: “Although impairments were relatively low in the quarter and we have seen some positive trends across our customer base, the full impact of Covid-19 remains very unclear.
“Challenging times lie ahead, especially as the current government support schemes come to an end and as new Covid-19 related restrictions are introduced.”