NatWest has seen its profit before tax increase by 18.4% year-on-year in its first half results, reaching £3.59bn.

The bank, which returned to full private ownership in May, added that its Q2 profit stood at £1.77bn, beating expectations set at £1.65bn.

Furthermore, its total income increased by 11.9% annually to £7.99bn in the six months to 30 June, while its net interest and non-interest income grew by 13.2% and 8.1% respectively to £6.12bn and £1.87bn.

NatWest also delivered an earnings per share of 30.9 pence, which is an increase of 28% year-on-year.

As part of its financial results announcement, the bank stated its intention to commence a £750m share buyback scheme.

This coincides with plans to distribute an interim dividend of 9.5 pence per share, totalling £768m, taking total pay outs to investors to just over £1.5bn.

Chief executive at NatWest, Paul Thwaite, said: "NatWest's strong performance in the first half of the year reflects our consistent support for our customers and, in turn, delivery for our shareholders.

"The role we play as a trusted partner to over 20 million customers is fundamental to our strategy and we continue to focus on helping them achieve their ambitions, with lending, deposits and assets under management once again increasing in H1 2025.

"With positive momentum in our business, we are ambitious for the future and see clear opportunities for further disciplined growth. This is complemented by our focus on bank-wide simplification, as we quietly revolutionise how we operate, enhancing our tech and AI capabilities in order to better meet and anticipate the evolving needs of our customers."

Looking ahead, NatWest has increased its expectations for the full financial year.

It stated that it expects to achieve a return on tangible equity of greater than 16.5%, while its operating costs, excluding litigation and conduct costs, are set to be around £8.1bn.

In the mid-term, NatWest is aiming to achieve a return on tangible equity of greater than 15% in 2027.

Senior equity analyst at Hargreaves Lansdown, Matt Britzman, said the results will please investors.

He concluded: "It’s a similar story to Lloyds yesterday, with better impairments doing most of the work to bring profits in a good clip above expectations. Unlike Lloyds, NatWest has taken the opportunity to raise its guidance, though this simply aligns management to where consensus is already sitting.

"The overarching story here is a positive one. Borrowers are looking strong, loans and deposits are growing, and costs are under control. That’s providing a strong base for the bank’s secret weapon, the structural hedge, to sit on top of. The hedge is expected to bring home an additional £1bn of income this year alone, as 0% products are being reinvested at yields of around 3.7%. This is a multi-year tailwind that’s helping underpin a positive outlook for NatWest."

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