NatWest Group PLC (LSE:NWG) looked to regain the faith of shareholders after a turbulent week, with strong profits, a share buy-back and solid dividend although it did caution UK net margins would be lower than previously forecast.
The high street lender, which has been plunged into crisis following the departure of boss Alison Rose, reported pre-tax profit in the six months to 30 June 2023 of £3.6bn, up from £2.6bn a year prior, and above the company compiled forecast of £3.3bn.
Chief financial officer Katie Murray said: "NatWest Group's strong performance for the first half of the year is underpinned by our robust balance sheet, with a high-quality deposit base, high levels of liquidity and a well-diversified loan book.”
Rising interest rates helped boost net interest income to £5.73bn from £4.33bn, with net interest margin (NIM) of 3.2% in the first-half compared to 2.58% a year ago although it fell to 3.13% in the second quarter.
For the full year, the bank lowered its NIM forecast to around 3.15% from 3.20 before although all other guidance was retained.
Similar to rivals Lloyds and Barclays, NatWest saw a jump in impairment charges to £223mln from a release of £54mln before.
Murray said: “Although arrears remain low, we know that people, families and businesses are anxious about their finances and many are really struggling.”
Shareholders were rewarded with a 5.5p dividend while the bank launched a £500mln buy-back programme planned for the second half of the year.
Customer deposit balances were stable in the second quarter following the outflows in the first quarter. Taking the half-year as a whole customer deposits decreased by £11.8bn to £421.1bn.
The Common Equity Tier ratio of 13.5% was 70 basis points lower than at 31 December 2022.