NatWest posts impressive profit growth amid return to private ownership

In the first quarter of 2025, NatWest, a major banking institution in the UK, announced a significant rise in profit, recording a 36% increase compared to the previous year. The bank's operating profit before tax for the period of January to March reached 1.8 billion pounds, up from 1.3 billion pounds in the same period the previous year, surpassing analysts' forecasts of 1.6 billion pounds. This surge in profit can be attributed to improved margins on the deposit base, increased loan balances, and enhanced trading income, indicators of a strengthening financial position for the institution. Furthermore, NatWest has seen its return on tangible equity rise to 18.5%, compared to 14.2% in the previous year, reflecting its robust operational performance. As the bank's government stake has now fallen below 2%, this latest financial success aligns with its upcoming transition to full private ownership, marking a pivotal moment for the institution. Following its rescue during the 2008 financial crisis, when the government held nearly 40% of NatWest, the bank is now preparing to shift from post-crisis restructuring and focus on domestic growth strategies. This shift is significant as it positions NatWest to navigate through global trade tensions more resiliently than its international rivals, who have been affected by economic uncertainties exacerbated by U.S. tariffs. Notably, the bank has reported a net impairment charge of 189 million pounds during the quarter, although it maintains a stable level of defaults. This reflects a cautious approach to credit risks as NatWest recalibrates its operations for an evolving market landscape. Chief Executive Paul Thwaite remarked on the bank’s performance and expressed optimism about reaching upper income and returns guidance through 2025, indicating confidence in the bank's strategic direction under its new growth-focused strategy. Overall, NatWest's recent financial results illustrate its successful transition away from the shadows of government ownership and its current emphasis on a sustainable, profit-focused future where it can operate independently and capitalize on growth opportunities within the UK market.