NatWest beats profit forecasts as Farage account row grips bank – business live

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From 1h ago 07.08 BST NatWest beats profit forecasts NatWest’s results for the first half of 2023 are hitting the wires now. And it has grown its profits year-on-year, and by more than forecast. Operating profits, before tax, have risen to £3.589bn, up from £2.62bn in the same period a year ago. That’s better than the £3.3bn which City analysts had expected. NatWest's H1 2023 results Photograph: NatWest 10m ago 07.58 BST Conservative MP Harriett Baldwin, who chairs parliament’s Treasury Committee, says this week’s banking results suggest there is “still some room to go on” until banks have passed on higher rates to their savers, as well as their borrowers. She tells the Today programme that her committee is concerned that savers aren’t receiving a fair rate. 29m ago 07.38 BST NatWest's NIM shrinks NatWest’s net interest margin – the gap between low savings rates and the high interest charged to mortgage and loan borrowers – has narrowed. Its NIM has dropped to 3.13% in April-June, down from 3.27% in January-March. NatWest says this is due to “asset margin pressure and changes in deposit mix from non-interest bearing to interest bearing balances.” That suggests savers have been taking action, moving cash from low-yielding accounts into other accounts which are more lucrative, and also running down savings to pay debts. 2nd, after Barx, in as many days to revise NIM f’cast lower…sign that clients are removing deposits to chase yield elsewhere, and that savings balances increasingly being used to pay mortgages as rates rise *NATWEST SEES FY NET INTEREST MARGIN ABOUT 3.15%, SAW ABOUT 3.2% — Michael Brown (@MrMBrown) July 28, 2023 NatWest has now lowered its forecast for full-year NIM to be less than 3.20%, with “a current view of around 3.15%”. It adds: This remains subject to market conditions including the assumption of a Bank of England base rate of 5.50% from Q3 2023 through to the end of the year. Banks have been accused of ‘blatant profiteering’ by passing on Bank of England interest rate hikes quickly to borrowers - but slower to savers. MPs accuse banks of ‘blatant profiteering’ as savings rates remain low Read more Britain’s biggest banks under pressure to pass on higher interest rates to savers Read more Updated at 07.49 BST 39m ago 07.28 BST NatWest has set aside more money to cover loan defaults. It has taken a £153m charge against impairments for the second quarter of 2023, on top of the £70m set asides in Q1, meaning a net impairment charge of £223m for the first half of the year. NatWest says this increase is driven by increased economic uncertainty, but adds that “defaults remain stable and at low levels across the portfolio”. 44m ago 07.23 BST NatWest announces £500m share buyback Having grown its profits this year, NatWest has announced it will buy back up to £500m of its shares from the market. This is a way of returning cash to shareholders, on top of dividends. The bank says: We have announced distributions of £2.3bn to shareholders in the first half of the year and accrued a further £0.3bn towards the final dividend payment in Q2 2023, bringing total distributions deducted from capital to £2.5bn for H1 2023. 47m ago 07.20 BST UK government to get £190m from NatWest UK taxpayers will benefit from NatWest’s performance this year, under the leadership of the now-ousted Alison Rose. NatWest has announced an interim dividend of 5.5p per share this morning, which will return around £492m to shareholders. As the UK government owns 38.53% of NatWest, this means £190m will go to the government on 15th September. 1h ago 07.11 BST NatWest: We know some people are really struggling Katie Murray, NatWest’s chief financial officer commented, says the bank has registered a “strong performance” in the first half of 2023. Murray says NatWest’s loan arrears (customers falling behind in repaying their debts) remain low, but many people, families and businesses are “really struggling”. Murray says: “NatWest Group’s strong performance for the first half of the year is underpinned by our robust balance sheet, with a well-diversified loan book, robust liquidity and stable deposit base. “As a result, we are able to continue lending to our customers and delivering sustainable returns and distributions to our shareholders, even in the current uncertain environment. “Although arrears remain low, we know that people, families and businesses are anxious about their finances and many are really struggling. We are being proactive in our support for those who are hardest hit, helping to build the financial resilience of the customers and communities we serve.” 1h ago 07.08 BST NatWest beats profit forecasts NatWest’s results for the first half of 2023 are hitting the wires now. And it has grown its profits year-on-year, and by more than forecast. Operating profits, before tax, have risen to £3.589bn, up from £2.62bn in the same period a year ago. That’s better than the £3.3bn which City analysts had expected. NatWest's H1 2023 results Photograph: NatWest