Yahoo Finance NatWest profits hit £1.2bn as it refers vulnerable clients to Citizens Advice
NatWest (NWG.L) reported a 41% jump in first-quarter profit as it benefited from rising interest rates but warned about a looming cost of living crisis.
The bank, which is partially owned by the UK government, revealed operating profits before tax of £1.2bn ($1.5bn) for the first three months of 2022, compared to £573m in the final three months of last year.
But chief executive Alison Rose said the rest of the year was set to be hard as customers and businesses get to grips with the cost of living crisis.
“The world has changed considerably during the last three months,” said NatWest’s chief executive, Alison Rose, noting the impact the Russian invasion of Ukraine was having on the UK economy.
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“We are also very aware of the challenges and concerns the cost of living crisis is causing for many of our customers up and down the country,” Rose added.
NatWest said that through its partnership with Citizens Advice, 2,100 customers in vulnerable situations have been referred by the bank and helped with complex advice needs in the last year.
NatWest shares were down in London as investors digested the results.
“Like several of its rivals, NatWest smashed forecasts but for investors the focus is much more on the outlook, which despite the boost to profit implied by rising interest rates, is heavily clouded by the risk of an increase in bad debts linked to the cost of living crisis," AJ Bell investment director Russ Mould, said.
Mortgages increased by 1.5% compared to the final three months of the year to £2.7bn and customer deposits rose £800m compared with the three months to end of December.
The bank's core capital ratio fell significantly, to 15.2% from 18.2% last year, partly due to the impact of regulatory changes.
Read more: Lloyds profits drop 14% as it warns over mortgage loans default
The bank also announced it would release £38m of cash held back during the COVID crisis, although this compares to £98m released previously out of £3.2bn held back at the start of the pandemic.
The former Royal Bank of Scotland made its return to majority private control last month after the government sold down the taxpayers’ stake in the bank to 48% earlier this year.
