NatWest deposit outflows tarnish jump in profit
British bank NatWest (NWG.L) reported a 20 billion pound fall in deposits in the first quarter amid a fiercely competitive environment and a cautious outlook pointing to the challenges ahead, taking the shine off forecast-beating profit.
NatWest’s income jumped 37% but came in just below analysts’ forecasts, as higher central bank interest rates that boost lending returns encouraged customers to shop around and forced banks to boost rates on savings products.
The bank’s shares fell 6% in early trading despite a jump in profit, as investors digested a third successive quarter of reduced deposits and analysts pointed to the lack of an expected upgrade to the bank’s performance forecast for the year.
NatWest reported pretax profit of 1.8 billion pounds ($2.25 billion) for the first quarter, up from 1.2 billion pounds achieved a year earlier and above an average of analyst forecasts of 1.6 billion pounds.
Like rival Barclays, which reported results on Thursday, higher interest rates continued to lift revenue.
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