According to figures from the quarterly results, new mortgage lending at NatWest has almost halved in the past twelve months.
The bank reported total gross new mortgage lending of £5.2 billion in the three months to the end of March 2024. This compared with £9.9 billion in the corresponding period the year before, and the £5.4 billion reported in the latest quarter of 2023.
Total net customer lending increased by £1.4 billion in the quarter, but this was largely due to a significant increase in commercial and institutional lending, which NatWest said offset the £1.7 billion decline in the retail banking division due to partially offset higher mortgage repayments.
Despite the lack of demand in the mortgage market, NatWest posted a pre-tax profit of £1.3 billion in the first quarter, down from the £1.9 billion reported in the first quarter of 2023. But as with Barclays yesterday, these profits were higher than those reported by analysts. ‘ predictions.
These results also show NatWest posting marginally higher pre-tax profits than the £1.2 billion reported for the final three months of last year.
Looking specifically at the retail banking business, NatWest generated total income of £44m – down 3.2% on the previous quarter. The bank said this was due to “continued dilution of mortgage margins” – and one day less in the comparable three-month period.
Paul Thwaite, CEO of NatWest, said: “The NatWest Group has delivered strong results for the first quarter – with an operating profit of £1.3 billion.
“Our performance is based on the critical role we play in the economy and in the lives of our 19 customers. While macro uncertainty persists, customer confidence and activity are improving, with both lending and deposits up in the quarter and impairments remaining low, reflecting our well-diversified business.”
He added that the bank was pleased with the recent momentum regarding the further reduction of HM Treasury’s stake in the bank.
Hargreaves Lansdown analyst Matt Britzman said NatWest’s results were “the best of the bunch” compared to other major banks. NatWest, Lloyds and Barclays have all reported a decline in pre-tax profits, largely due to a subdued mortgage market in the UK.