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Natwest reports an increase in annual profits after an increase in loan books, improved margins and lower defaults despite the UK economy shaking late last year.
Lenders on Friday announced net profit of £4.8 billion for 2024, up from £4.6 billion the previous year.
Its net interest margin – The difference between the interest received on a loan and the rate paid on deposits rose slightly to 2.19% from 2.18% in the last quarter. The advantage of the decline rate.
“As a uncertain external background, we have made good progress on our strategic priorities, grown three customer businesses, and seen accelerated in reducing UK government shareholdings.”
Natwest’s operating expenses increased by 5.2% annually to £2.3 billion. This is because the group flagged “increased retirement costs and asset exit costs.”
The UK government is shrinking its shares in lenders rescued at £46 billion in relief during the height of the financial crisis, when known as RBS.
The Treasury said Friday it sold more shares at the bank. It currently houses just under 7% from 38% in December 2023, and plans to sell the remaining shares over the coming months.
“2025 is likely the year that Natwest Group will return to full personal ownership,” Thwaite said. “Accelerating privatization has attracted investment from people who share our growth ambitions and mark the bank’s new future look chapter.”
A return to full personal ownership is expected to free Natwest and pursue growth more proactively. Thwaite shows he is open to acquiring new businesses.
Under his leadership, High Street lenders purchased a large portion of Sainsbury’s banks to expand their unsecured lending business. He also purchased a major mortgage of £2.5 billion from Metro Bank.
Natwest’s profits on tangible capital (an important measure of profitability) slipped to just 17.5% last year, but both loan and deposit books have grown. Previously, the measure was targeted at 13% by 2026, but now it is expected that this measure will exceed 15% at the end of 2027.
The bank also announced its full-year dividend would increase by 26% to 21.5p, and said it plans to increase the share of profits it pays as a dividend from 40% to 50%.
The results come a year after Thwaite was permanently confirmed as CEO. He was provisional in July 2023 after his predecessor, Allison Rosedame, suddenly resigned following a political uproar over Nigel Farage’s “unearth” by the courts of a private bank in Natswest. It was installed as a head.
Natwest shares have been worth more than doubled over the past year, with loans increasing and an upgrade to its profit target in October.
