NatWest mortgage lending slips to £5.2bn in Q1

NatWest has reported a fall in its total gross new mortgage lending to £5.2bn in the first quarter of 2024, a figure down from £9.9bn in Q1 last year.

The bank’s total income, excluding notable items, reached £3.4bn in Q1. This was down by £28m (0.8%) compared to Q4 2023, with NatWest citing “mortgage margin pressure” as a reason behind the decline.

NatWest’s results follow other major banks Lloyds and Barclays in reporting falls in their Q1 mortgage lending this week.

Elsewhere in Natwest’s latest figures, it reported a fall in its net interest margins from 2.25% in the same period last year to 2.05%, while lower deposit balances also caused a fall in net interest income to £2.7bn, down from £2.9bn.

NatWest chief executive, Paul Thwaite, said that despite “macro-uncertainty” continuing, the bank’s customer confidence and activity is improving.

“We are ambitious for this bank, and by succeeding for our customers, we will succeed for our shareholders,” he said. “Our first priority is delivering disciplined growth across our three businesses by serving our customers well.

“At the same time, we are becoming simpler, more productive and easier to deal with. As a result, we aim to generate returns that allow us to support our customers, invest in our business and deliver attractive distributions to shareholders.

“We are also pleased with the recent momentum in the reduction of HM Treasury’s stake in the bank. Returning NatWest to private ownership is a shared ambition and we believe it is in the best interests of both the bank and all our shareholders.”

Equity analyst at Hargreaves Lansdown, Matt Britzman, added: “Of the UK-listed banks, NatWest looks best placed to benefit from a higher rate environment as its structural hedge comes off some of the lowest rates in the sector. Think of this like a bond portfolio that’s rolling on to higher yields over the next few years.

“Management has kept guidance largely in place, which still looks on the conservative side given it factors in several rate cuts this year that really don’t look likely to come. That leaves NatWest not only with the potential for operational strength but also paves the way for positive income surprises later in the year.”



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