NatWest Group PLC (LSE: NWG) experienced a significant 47% decline in mortgage lending year-on-year for the first quarter of 2024, with the total amount lent dropping from £9.9 billion to £5.2 billion.
The bank’s net interest margins decreased from 2.25% during the same period last year to 2.05%. Additionally, a reduction in deposit balances led to a decrease in net interest income, which fell from £2.9 billion to £2.65 billion.
Profits attributable to shareholders decreased by 28% to £918 million, and the return on tangible equity (RoTE) decreased by 560 basis points to 14.2%.
NatWest cited “increased mortgage margin pressure” as the reason for a 10% year-on-year decrease in total income.
The CET1 capital ratio was in line with expectations at 13.5%.
In Retail Banking, there was a 7.1% reduction in headcount, which helped lower operating expenses in certain areas, although overall expenses rose due to severance costs and the Bank of England Levy.
As a part of its ongoing share buyback program, NatWest repurchased and cancelled £42.4 million worth of shares on March 31.
NatWest has maintained its full-year outlook, except for group operating costs, which are projected to increase by £100 million over 2023, primarily due to higher bank levies.
Paul Thwaite, NatWest’s chief executive, stated: “Despite ongoing macroeconomic uncertainty, we are seeing an improvement in customer confidence and activity, as evidenced by increases in both lending and deposits this quarter, along with low impairments, showcasing the strength of our diversified business.”
