This is also higher than the £9.8bn in gross mortgage lending it completed in Q2. So far this year, gross new mortgage lending at Natwest has reached £29.9bn.
Net lending within the go-forward group, which comprises Natwest’s subsidiaries excluding Ulster Bank RoI and discontinued operations, increased by £9.9bn or 27 per cent in Q3. This included £3.9bn of mortgage lending growth in retail banking.
Natwest saw an operating profit before tax of £1bn, down from £1.4bn in Q2 but higher than £976m for the same period last year.
On a quarterly basis, its net interest margin rose by 27 basis points to 2.99 per cent due to the base rate rises. Annually, this was up from 2.28 per cent.
During Q3, its mortgage back book margin stood at 138 basis points.
Natwest’s total income up 30 per cent
There was a net impairment charge of £242m during the period in the go-forward group. Natwest said this was not down to underlying book performance where conditions remained “benign” but was down to the group putting more weight on a potential downside economic scenario.
Looking ahead, Natwest predicts that its income will be supported by higher interest rates and does not expect costs to be stable because of increased inflationary pressures.
It said its loan book was “performing well” and although it expects impairments to increase, it was comfortable with a loss rate guidance of 20-30 basis points.
Natwest’s total income came to £344m, a 30.4 per cent rise on last year, which it said reflected higher deposit income supported by interest rate rises, strong loan growth and higher transactional-related fee income.
Natwest: ‘Able to help those who need it’
Alison Rose (pictured), chief executive of Natwest, said: “In a challenging environment, NatWest Group continues to deliver a strong financial performance; supporting our customers, responsibly growing our lending and making significant investments to transform the bank.
“At a time of increased economic uncertainty, we are acutely aware of the challenges that people, families and businesses are facing up and down the country. Although we are not yet seeing signs of heightened financial distress, we are very conscious of the growing concerns of our customers and we are closely monitoring any changes to their finances or behaviours.”
She added: “The bank’s strong capital and liquidity mean we are able to help those who are likely to need it the most, through support for our community partners, proactive outreach to our customers or targeted lending packages for the most impacted sectors.”
