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Natwest’s pre-tax profits triple due to strong mortgage growth

  • 29/10/2021
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Natwest’s pre-tax profits triple due to strong mortgage growth
Natwest has reported a pre-tax profit of £1.1bn, almost triple the £355m it saw a year ago.


The bank attributed the performance to its mortgage business which generated £8.3bn of gross new lending. This was down on the £9.6bn it posted in Q2, but up on the £6.7bn during the same period in 2020. 

In the update Alison Rose, chief executive (pictured), reiterated the bank’s target to deliver an additional £100bn of sustainable financing by the end of 2025, with the results noting it had completed £565m in green mortgage lending for the year to date.  

Strong mortgage activity also led to Natwest’s increase in net interest income which rose 0.3 per cent to £1.95bn.  

Excluding government support schemes, net lending rose by £2.9bn, with £2.5bn attributable to mortgage growth. 

A low rate environment and ascending swap rates saw the bank’s net interest margin contract by six basis points to 2.34 per cent in Q3. It noted that as swap rates continued to rise in October, it had increased pricing across lower loan to value (LTV) mortgages to offset this. 

These include the rate increases the lender announced this week which saw products at 60-75 per cent LTV rise by 0.10 per cent. 

It also noted a £294m litigation and conduct charge for the quarter, in anticipation of any fines the bank may face after pleading guilty for failing to comply with anti-money laundering regulations. 

Natwest is set to be sentenced in the coming weeks. 

Rose added: “Throughout Q3 2021, NatWest continued to deliver a strong operating performance; growing in key areas and accelerating our digital transformation to improve customer experience and make our business more efficient.  

“Although we are seeing challenges in the economy and for our customers – especially around supply chains and the cost of living – a number of key indicators remain positive; growth is good, unemployment is low and there are limited signs of default across our book.” 

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