Unlock Editor’s Digest for free
FT editor Rula Khalaf picks his favourite articles from this weekly newsletter.
NatWest said it would be more profitable than expected this year after the state-owned bank’s second-quarter results beat expectations.
The state-owned bank reported quarterly pre-tax operating profit of £1.7 billion, beating analysts’ expectations of £1.3 billion. It expects the return on tangible assets, a key measure of bank profitability, to rise to more than 14% from previous forecasts of 12%.
The bank’s shares surged as much as 8% in early trading Friday and have gained nearly 60% this year.
NatWest also announced it had acquired £2.5 billion of high-quality home loans from Metro Bank, which it said would add around 10,000 customers. The acquisition comes after NatWest announced last month that it had acquired most of Sainsbury’s Bank, giving it access to an expected one million new accounts and £2.5 billion worth of unsecured loans.
“We have made good progress on our strategic priorities and taken decisive action to grow and simplify our business,” said CEO Paul Thwaites. “Customers are starting to feel confident as activity increases and asset quality remains strong.”
Revenue for the quarter fell to £3.7 billion from a year earlier as the benefit of higher interest rates waned, but still beat expectations of £3.4 billion.
The lender also said it had spent £24 million preparing a plan drawn up by the previous Conservative government that would have seen the state sell some of its remaining stake to retail investors. The outcome of the plan is uncertain.
