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Mortgage performance drives NatWest’s profits to £4bn
Strong mortgage lending helped NatWest return to a profit following 2020’s £481m loss.
NatWest has reported a full year pre-tax profit of £4bn, helped by £36bn in gross new mortgage lending during 2021. This is compared to £31.5bn of gross mortgage lending in 2020.
The bank, which reported a £351m pre-tax loss in 2020, announced total income of £10.5bn in 2021, which was flat compared with 2020.
NatWest said it would be distributing more than £3.8bn capital to its shareholders, which included £1.7bn to the taxpayer via dividends and buybacks in 2021.
Net lending was also up, at £7.8bn, an increase of 2.6% on 2020. Meanwhile customer deposits increased by £35.8bn to £329.4bn. The lender said it reflected £26.4bn growth in deposits as customers continued to build and retain liquidity in light of economic uncertainty.
But it took a hit after being fined £264.8m in the year for failing to comply with money laundering regulations.
However, total impairment provisions reduced by £2.4bn to £3.8bn during 2021. It said while it was “comfortable with the strong credit performance” of its book, it continued to hold economic uncertainty post model adjustments (PMAs) of £600m, or 15.3% of total impairment provisions.
It added: “We will continue to assess this position throughout the year.”
Alison Rose, chief executive of NatWest Group, said the results reflected an improved economic outlook.
She said: “As our economy recovers and the trend towards digital services accelerates, we are investing to deliver long term value in the bank and drive sustainable growth. We will do this by building closer and deeper relationships with our customers and by supporting their evolving needs and expectations at every stage of their lives.”
