In a strategic move, NatWest has significantly reduced its mortgage lending, marking a nearly 50% decline in the first quarter of 2023. This decision was driven by a combination of decreased demand for mortgages and reduced availability of deals in the competitive market. CEO Paul Thwaite highlighted the bank’s focus on profitability, stating that they consciously decided not to compete across all segments during the latter part of 2022.
Despite the lending slump, NatWest Group, which includes Royal Bank of Scotland and Coutts, reported a pre-tax profit of £1.3 billion for the first quarter. This represents a decrease from the previous year’s £1.8 billion, but surpasses analysts’ expectations. The bank’s total income dipped by 10%, influenced by customers shifting funds from current to savings accounts.
NatWest remains optimistic about improving customer sentiment amidst cost-of-living pressures. Mr. Thwaite indicated a positive outlook as households become more confident. The bank has also taken steps to prepare for the government’s potential sale of its remaining shares. NatWest shares experienced a growth of over 4% on Friday morning, reflecting the market’s response to the bank’s strategic moves and financial performance.
