NatWest upgrades income forecast and mortgage lending soars
The bank said that it lent £11 billion to new home buyers in the last three-month period.
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Your support makes all the difference.NatWest has upgraded expectations for the year as the company’s mortgage book grew and the chief executive said the bank is seeing “no signs” of families in added financial distress.
The bank told shareholders on Friday that it expects to make £12.8 billion in total income for the financial year, up from £12.5 billion in previous forecasts.
It comes as interest rates increased for mortgage holders – and others – up and down the UK.
Yet the company’s retail arm lent £11 billion in new mortgages in the three months to the end of September, nearly £3 billion higher than this time last year and up 12% compared to the previous quarter.
It comes as the economy has been put under extra strain since the start of the year, with mortgage rates rapidly increasing in a bid by the Bank of England to try to control inflation.
Although we are not yet seeing signs of heightened financial distress, we are very conscious of the growing concerns of our customers and we are closely monitoring any changes to their finances or behaviours
Yet boss Alison Rose said that while customers are worried, their pain is not yet showing up in the bank’s books.
“At a time of increased economic uncertainty, we are acutely aware of the challenges that people, families and businesses are facing up and down the country.
“Although we are not yet seeing signs of heightened financial distress, we are very conscious of the growing concerns of our customers and we are closely monitoring any changes to their finances or behaviours,” she said.
“The bank’s strong capital and liquidity mean we are able to help those who are likely to need it the most, through support for our community partners, proactive outreach to our customers or targeted lending packages for the most impacted sectors.”
The bank said that it had passed on around 25% to 30% of the increased interest rates to savers since the last quarter of 2021.
Total income reached £3.23 billion in the third quarter of the year, up from £2.7 billion a year before and just surpassing expectations.
Pre-tax operating profit hit £1.1 billion, up from a little under £1 billion a year earlier.
Ms Rose added: “In a challenging environment, NatWest Group continues to deliver a strong financial performance; supporting our customers, responsibly growing our lending and making significant investments to transform the bank.”