According to the latest financial results from Natwest, it helped 379,000 retail banking customers buy or remortgage their home.
The company, which yesterday increased rates on select mortgages, said that arrears levels were “increasing but remain low”. Specific figures were not in the report.
The lender said that £65bn or 29 per cent mortgage stock repriced in 2023, and it expected that £34bn or 19 per cent of its fixed book to expire in 2024.
Around 64 per cent of its loan book is on five-year fixed rate, 24 per cent are on two-year fixed rate, one per cent are on a 10-year fixed rate, six per cent are on tracker deals and four per cent are on the standard variable rate (SVR).
The bank has a 12.7 per cent share of UK mortgages, and during the year, its loan to value (LTV) was 55 per cent, which was stable year-on-year (YOY).
The report also said that there was an impairment charge of £35m for mortgages in 2023, which compared to an impairment release of £74m in 2022.
The bank reported an overall operating profit of £6.2bn in 2023, a rise of 20 per cent YOY.
Natwest’s total income was £285m – five per cent higher than 2022 – which it said showed “higher lending growth and the impact of rate rises on deposit income”.
However, this was partially offset by “mortgage margin dilution, higher treasury funding costs and impact of the deposit balance mix shift from non-interest-bearing current accounts to interest-bearing term balances”.
Natwest’s bank net interest margin (NIM) came to 3.04 per cent, which is 19 basis points higher than 2022. This reflects “favourable yield curve movements”, but was partially offset by “lending margin pressure, reduced deposits balances and mix changes”.
Other operating expenses were £227m, 9.1 per cent up on 2022, which it said was due to “higher pay awards” to employees to help with the cost of living, lease termination losses, increased restructuring costs and investment in the business.
The bank said that this was offset by savings from a 6.3 per cent reduction in headcount.
Natwest delivered ‘strong performance’ in ‘exceptional’ environment
Natwest Group’s chief executive Paul Thwaite said it had delivered a “strong performance in an exceptional macro environment”.
“Our operating profit was up 20 per cent on the year before, with a return on tangible equity of 17.8 per cent and £3.6bn of distributions to shareholders.
“The strength of our balance sheet allows us to support our customers, and our performance is grounded in the services we have provided to help them reach their financial goals and manage their money better,” he continued.
Thwaite added: “As we look ahead, I am ambitious and confident for the future of Natwest Group. We should not underestimate the strength of our foundations or the opportunity to build deeper relationships with our 19 million customers. Our number-one priority is to serve our customers well and provide them with the products, services, and expertise they need.
“This year, we are focused on the things we can control; delivering profitable growth, becoming more efficient, more productive, and simpler to deal with, whilst managing our cost and capital efficiently. Together, these actions will drive long-term, sustainable value for our customers, shareholders, and the wider UK economy.”
