This was down on the previous quarter, however, when the lender completed £11.5bn in gross mortgage lending.
Natwest said its mortgage business benefitted from “elevated application volumes” in September and October last year.
Its net interest margin was 3.27 per cent, seven basis points higher than the previous quarter. Natwest said this reflected lower mortgage margins but was offset by higher deposit returns.
The lender provided £40.2bn in sustainable funding and financing, as part of its goal to lend £100bn by 2025. It said it aimed to provide at least £10bn for residential properties with an EPC rating of A or B from 1 January 2023 to the end of 2025.
In Q1, it completed £1.3bn in lending to properties in this category.
There was a net impairment charge of £70m in Q1, accounting for 0.07 per cent of gross customer loans. It said this reflected the “strong performance” of its lending book and it noted that default levels were low across its portfolio.
Natwest’s total income, excluding notable items, rose by 37 per cent to £1.03bn compared with the same period last year. It saw a profit before tax of £1.8bn, up from £1.5bn in Q4 and £1.1bn a year ago.
A ‘disciplined and consistent approach’
Alison Rose (pictured), chief executive of Natwest, said: “Natwest Group’s strong performance in Q1 2023 is underpinned by our robust balance sheet, our high levels of capital and liquidity and our well-diversified loan book. Through a period of significant macro disruption and uncertainty, we continue to stand alongside the people, families and businesses we serve, providing targeted support and growing our lending responsibly.
“Our disciplined and consistent approach to risk management means that arrears and impairments remain low. By monitoring customer behaviour and looking closely for signs of financial distress, we are able to put in place proactive measures to help those who are struggling right now and those who are worried about the future.
“As we continue to make progress against our strategic priorities, Natwest Group is well positioned to navigate this challenging operating environment and to deliver sustainable growth and returns by responding to new and emerging trends that are shaping the lives of our customers.”
