NatWest reports stable profit amid increased expenses

Published 14/02/2025, 09:02
NatWest reports stable profit amid increased expenses

LONDON - National Westminster Bank Plc (NatWest) reported a stable year-over-year profit for 2024, despite a slight dip compared to the previous year. The bank, a subsidiary of NatWest Holdings Limited and part of the larger NatWest Group, announced a profit of £3,425 million for the year, marginally down from 2023's £3,509 million.

The financial performance was characterized by a modest decrease in total income and an uptick in operating expenses. Total (EPA:TTEF) income fell by £113 million to £11,973 million, attributed primarily to a decline in non-interest income, including a decrease in gains from economic hedging derivatives and a gain on redemption of own debt realized in 2023.

Operating expenses rose by £170 million to £6,963 million, driven by higher staffing costs from planned restructuring and increased investment in technology. However, these were partially offset by reductions in conduct and managed services costs.

Net impairment losses showed a year-on-year reduction of £157 million, reflecting good book releases and updates to the IFRS 9 multiple economic scenario. Total impairment provisions decreased slightly to £2.7 billion, with the expected credit loss coverage ratio dropping from 0.88% to 0.81%.

On the balance sheet, NatWest demonstrated resilience with total assets climbing by £8.8 billion to £424.3 billion, mainly due to an increase in loans to customers and other financial assets. Customer deposits also grew by £4.5 billion, driven by growth in savings balances and a shift towards interest-bearing accounts.

The bank's capital position remained robust, though the Common Equity Tier 1 (CET1) ratio edged down by 20 basis points to 11.4%, reflecting a rise in risk-weighted assets partly counterbalanced by a small increase in CET1 capital.

The full-year results, approved by the board of directors on February 13, 2025, are based on a press release statement and do not indicate any significant events post balance sheet date that could necessitate revisions to the accounts.

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