NatWest Group has become the latest major British bank to beat profit expectations despite seeing a jump in customers withdrawing money at the start of the year.
The group reported an operating profit before tax of £1.8 billion (€2.04 billion) in the first three months of the year.
It comes in well ahead of analysts’ expectations at £1.6 billion for the quarter and more than 50 per higher than the £1.2 billion recorded this time last year.
It follows rival bank Barclays posting a better-than-expected quarterly profit and its largest in at least 12 years.
NatWest Group, which includes Royal Bank of Scotland and Ulster Bank, also saw its total income surge by more than a third over the period, helped by higher interest rates which makes it more expensive to borrow.
However, the bank said its customers withdrew nearly £20 billion from accounts during the period, which it partly blamed on its exit from the Republic of Ireland this year, having decided to shut its entire Ulster Bank branch network in the region.
Excluding that, £11 billion flowed out of the bank, or 2.6 per cent of its total deposits, which NatWest said was a result of higher tax payments at the start of the year, fiercer competition for better savings rates and market volatility.
It also revealed it saw a growing number of people using its fixed-term savings products in the first quarter as people looked to make the most of higher interest rates.
Alison Rose, NatWest Group’s chief executive, said that despite cost-of-living pressures, the lender has not seen a rise in customers falling into arrears on their loans.
She said: “Through a period of significant disruption and uncertainty, we continue to stand alongside the people, families and businesses we serve, providing targeted support and growing our lending responsibly.
“Our disciplined and consistent approach to risk management means that arrears and impairments remain low.
“By monitoring customer behaviour and looking closely for signs of financial distress, we are able to put in place proactive measures to help those who are struggling right now and those who are worried about the future.”
