NatWest Group plc delivers above-target financial results for 2023

In a robust financial update, NatWest Group plc has announced a significant full year attributable profit of £4.4 billion for the year ended 31 December 2023, with a return on tangible equity (RoTE) standing impressively at 17.8%. This performance not only underscores the bank’s effective strategy and operational efficiency but also highlights its ability to exceed the guided range, setting a positive tone for its stakeholders.

The financial institution recorded a total income, excluding notable items, of £14.3 billion, marking a 9.8% increase compared to the previous year. This growth primarily reflects the favorable yield curve movements, higher income from the markets business, and lending growth, despite facing challenges such as reduced deposit balances and lending margin pressures. Additionally, the bank’s net interest margin (NIM) saw an increase to 3.04%, further highlighting its robust financial management and operational strategy.

Operating expenses also saw a rise to £7.6 billion, a 4.6% increase from 2022, with the cost-income ratio improving significantly to 51.8%. Moreover, a disciplined approach towards capital allocation and balance sheet management has enabled NatWest Group to announce a generous £3.6 billion return to shareholders, including dividends representing a 26% increase from 2022.

The bank has showcased a strong balance sheet, with net loans to customers (excluding central items) growing by £8.9 billion or 2.6% to £355.6 billion in 2023. This growth is attributed to increases in both Retail Banking and Commercial & Institutional lending. The bank has also made substantial progress towards its commitment to providing £100 billion in climate and sustainable funding by 2025, having already allocated £61.9 billion.

Looking ahead to 2024, NatWest Group plc remains focused on disciplined growth, operational simplification, and efficient capital deployment. The bank’s comprehensive strategy not only aims at enhancing shareholder value but also at contributing significantly to the UK economy and supporting the transition to a more sustainable future.

Paul Thwaite, Chief Executive of NatWest Group, expressed optimism about the future, emphasizing the strong foundation and the potential to deepen customer relationships. Thwaite highlighted the bank’s commitment to serving customers effectively, focusing on profitable growth, and driving long-term sustainable value for stakeholders.

NatWest Group’s 2023 performance not only showcases its financial resilience but also its strategic foresight in navigating a complex market environment. The bank’s ability to deliver substantial profits, manage costs effectively, and commit to sustainable financing positions it well for future growth. As NatWest Group continues to focus on operational efficiency and strategic investments, it remains a pivotal player in the UK’s financial sector, poised for continued success.