NatWest has reported a 36% jump in profits in the first three months of this year as the UK government reduced its stake in the bank to less than 2%, paving a return to fully private ownership after 17 years.
The bank reported operating profit before tax of £1.8bn, up from £1.3bn in the same period last year, beating analyst consensus forecasts by £200m.
The rise was driven by higher deposits in NatWest’s retail and commercial banking services and increased mortgage lending, as homebuyers in England and Northern Ireland raced to complete purchases before the increase in stamp duty at the end of March.
Paul Thwaite, the NatWest chief executive, said the strong performance meant the bank expected to hit the upper end of its guidance on income and shareholder returns this year.
The results came hours after the government moved to reduce its stake in NatWest to 1.98% on Thursday. Last year, the government shareholding fell by almost three-quarters – down from 38% at the end of 2023 to just under 10% in December, through a combination of two direct buybacks by NatWest and a rapid sell-off.
The Treasury spent almost £46bn to bail out NatWest, then known as Royal Bank of Scotland, at the height of the financial crisis in 2008. The resulting nationalisation left taxpayers owning about 84% of the lender.
Last month, Rick Haythornthwaite, the chair of NatWest, thanked UK taxpayers for the bank’s bailout, assuring shareholders that bosses had “fixed the issues of the past” and would not “open up floodgates of risk” despite government pressure.
The bailout has come at a massive cost to the public, however. The government is expected to recoup only about £25bn of the £46bn it spent rescuing NatWest in 2008, with its shares sold below the 500p at which they were bought. On Friday, shares in NatWest were trading at about 482p, and are up 59% over the past year.
In April, shareholders approved a controversial 43% increase in the maximum for Thwaite, giving him the chance to earn up to £7.7m for a single year’s work.
In a call to reporters after the results, the chief executive said that while consumer and business sentiment had dropped as a result of domestic and macroeconomic issues such as the trade war over tariffs, the bank had so far not seen any “material changes” in customer behaviour.
Thwaite said: “Seventy per cent of our corporate credit exposure is in the services sector and [only] a very small number are directly impacted by US tariffs. Large corporates are very mindful of the uncertainty, some are in ‘wait and see mode’ [or] pausing.”
He added that NatWest had not “seen any material changes in behaviour” among retail and small business consumers.
The bank said its exposure to sectors particularly affected by the tariff war was limited, citing the example of manufacturing, which it said accounted for only 2% of its group loan book.
The rival bank Standard Chartered also reported a strong first quarter on Thursday, with profits up 10% to $2.2bn (£1.65bn). However, the London-based institution warned of the potential impact of US tariffs as it reported a credit impairment charge of $219m in the period, up 24% year on year, as signs of trade tension affected credit quality.
“We delivered a strong performance in the first quarter of 2025,” said Bill Winters, the chief executive of the bank. “The subsequent imposition of trade tariffs has increased global economic and geopolitical complexity, and we remain watchful of the external environment.
On Thursday, Lloyds revealed a 7% slide in first-quarter profits to £1.5bn, mainly because of higher costs and impairment charges as it set aside £309m to account for possible bad debts amid the worsening global economic situation. That figure included a £35m net charge to prepare for the possible impact from Donald Trump’s tariffs.
On Tuesday, HSBC reported a 25% fall in first-quarter profits, mainly because of the same period last year benefiting from the proceeds of the sale of its banking business in Canada and its entire division in Argentina. The bank also warned of the impact of tariffs, reporting a $200m rise in expected credit losses to $900m in the first quarter.
