NatWest Group has reported an attributable profit of £1.25bn for the first quarter of 2025 (Q1 2025), an increase of 36.4% compared to £918m for the same period of the previous year.
This result was driven by strong financial performance across various segments, with earnings per share recorded at 15.5p. The return on tangible equity (RoTE) was 18.5%, contributing to a capital generation of 49 basis points before distributions.
The bank’s net interest income for Q1 2025 rose to £3.02bn, marking a 2% increase from the previous quarter and a 14.1% rise compared to Q1 2024.
Non-interest income also saw an uptick, reaching £954m, which represents a gain of 11.3% from the prior quarter and a 15.8% increase year-on-year.
Consequently, total income for the quarter climbed to £3.98bn, showing growth of 4.1% from Q4 2024 and a rise of 14.5% compared to the same quarter last year.
There was a decrease in operating expenses by £288m or 12.7% from Q4 2024, bringing them down to £1.98bn. The reduction was partly due to lower strategic costs related to property exits and contributed to an improved profit before impairments of £2bn.
This figure reflects a growth of 28.4% from the preceding quarter and an increase of 40.6% compared to Q1 2024.
Impairment losses in this period rose significantly to £189m, more than doubling when compared to figures from both Q4 2024 and Q1 2024. Despite this, operating profit before tax increased to £1.8bn, representing growth of 21.4% from Q4 2024 and an increase of 36.2% year-on-year.
During the quarter, net loans to customers increased by £3.4bn or 0.9%, reaching £371.9bn, driven mainly by mortgages and corporate growth in institutions. Customer deposits also saw an increase of £2.1bn or 0.5%, supported by growth in Commercial & Institutional and Retail Banking sectors.
The liquidity coverage ratio (LCR) remained stable at 150%, providing a headroom of £54.2bn above the minimum requirement despite increased lending activities being offset by greater issuance.
NatWest’s Common Equity Tier 1 (CET1) ratio improved by 20 basis points since December 2024, reaching 13.8%, as risk-weighted assets (RWAs) grew by £3.8bn over the period.
Looking ahead, NatWest Group aims for a return on tangible equity at the upper end of its previously guided range of 15-16% for the year and anticipates income excluding notable items within £15.2-15.7bn.
Operating costs are projected at approximately £8.1bn excluding litigation and conduct costs, with a loan impairment rate expected below 20 basis points for year-end.
The bank expects RWAs will range between £190-195bn by the end of 2025, subject to final CRD IV model outcomes, while targeting a CET1 ratio within the range of 13-14%.
NatWest Group chief executive Paul Thwaite said: “Our strong first quarter performance demonstrates the positive momentum in our business as we deliver against clear strategic priorities, and we now expect to be at the upper end of our income and returns guidance for 2025.
“This performance is underpinned by continued growth across our three businesses and the support we provide to over 19 million customers, whether that is buying a home, growing a business or investing their money.”
