NatWest Group PLC (LSE:NWG) delivered stronger-than-expected results for 2024, with income and return on equity exceeding forecasts.
The bank reported a return on tangible equity of 17.5 per cent, a key measure of profitability, which surpassed its own upgraded guidance. Total income for the year, excluding one-off items, reached £14.6 billion, reflecting growth in deposit margins and lending.
Net profit for the year came in at £4.5 billion (up 2.9 per cent), with earnings per share rising 12 per cent to 53.5 pence.
The bank also announced a final dividend of 15.5 pence per share, bringing the total annual payout to 21.5 pence, an increase of 26 per cent compared to 2023. In total, NatWest distributed £4 billion to shareholders through dividends and share buybacks.
Chief Executive Paul Thwaite highlighted the progress made in expanding NatWest’s customer base.
Over the course of the year, the bank welcomed 500,000 new customers and grew its lending and deposit base across retail, commercial and institutional banking. Mortgage lending increased by £3.2 billion, including £2.2 billion from its purchase of Metro Bank’s mortgage portfolio, while commercial lending expanded by £10 billion.
Customer deposits also rose by £12.2 billion to £431.3 billion. The bank’s liquidity position remained strong, with a liquidity coverage ratio of 150 per cent, providing a significant buffer above regulatory requirements.
NatWest continued to invest in its digital services and product offerings. It launched a new travel credit card with no foreign transaction fees and introduced a mortgage process that can provide offers in as little as 24 hours. The bank also expanded lending options for high-growth businesses by allowing them to use intellectual property as collateral.
In addition to organic growth, NatWest made strategic acquisitions to strengthen its retail banking division. It acquired the retail assets and liabilities of Sainsbury’s Bank, a deal expected to add around one million customer accounts once completed. The bank also purchased £2.3 billion in prime residential mortgages from Metro Bank in September.
NatWest reaffirmed its commitment to supporting sustainability initiatives. It provided £31.5 billion in climate and sustainable funding in 2024, bringing its total to £93.4 billion towards its goal of £100 billion by the end of 2025.
The UK government’s reduction of its stake in the bank was another key development during the year. NatWest noted an acceleration in the government’s sale of shares, a step towards the bank’s return to full private ownership.
For the final quarter of 2024, NatWest reported an attributable profit of £1.25 billion, with a return on tangible equity of 19 per cent. Income excluding one-off items was £3.87 billion, up 2.7 per cent from the previous quarter. Net loans to customers increased by £4.8 billion, while deposits rose by £3.9 billion.
Despite strong results, the bank remains cautious about the economic outlook for 2025. It expects to generate income between £15.2 billion and £15.7 billion and aims for a return on tangible equity of 15 to 16 per cent. The bank also plans to increase its ordinary dividend payout to around 50 per cent of attributable profit from 2025.