NatWest has recorded an 11.6% quarter-on-quarter increase in its profit before impairment losses, totalling £2.3bn in the three months to 31 March.

The bank recorded a total income of £4.4bn, which remained broadly flat compared with Q4, while its attributable profit stood at £1.43bn.

Its customer deposits, excluding central items, increased by £3.1bn to £444.8bn, reflecting £5.1bn growth in commercial and institutional, driven by growth in corporate and institutions, and a £3.3bn increase in its retail banking mortgage balances.

Furthermore, its return on tangible equity stood at 18.2% in this period. NatWest recorded a 1.4% drop in its net interest income to £3.39bn in Q1, while its non-interest income increased by 9.2% to £964m.

NatWest said it is "growing in ways that build strengthen customer relationships", while focusing on its priority segments and deepening customer connections.

Chief executive at NatWest, Paul Thwaite, said the group’s “strong performance” reflects its “consistent delivery for customers and shareholders”.

He stated: "Having raised our ambitions in February 2026, we have continued to make good progress against our strategic priorities in Q1 2026. We have started the year with positive momentum, underpinned by healthy customer activity - growing all of our three businesses, expanding our capabilities to meet more of our customers' needs and further improving productivity as we use AI at scale across the bank.

"NatWest has a vital role to play in the lives of our customers and in the communities we serve throughout the UK. The strength of our balance sheet, scale of our business and depth of our long-standing relationships mean that we can provide the funding, advice and expertise our 20 million customers need in order to navigate increasing uncertainty and to achieve their goals."

In its outlook, NatWest has stated that based on its latest expectations for interest rates and economic conditions, it now expects its income excluding notable items to be at the top end of its previous guidance range of £17.2bn and £17.6bn.

However, it has reaffirmed its outlook provided in its FY25 results. While NatWest is confident in achieving this guidance, it stated that it recognises that market conditions are “uncertain” and it will refine its internal forecasts as the economic position evolves.

Following the announcement, shares in the banking group fell by over 3%.

Investment director at AJ Bell, Russ Mould, said that NatWest has recorded an "impressive performance" at a headline level in Q1.

He concluded: "However, there is a flipside as NatWest has been forced to increase its provisions for bad loans as the economic toll on borrowers from the Iran war and the inflationary pressures it has unleashed is likely to tell over the coming period. This, combined with net interest income which was just a smidge below expectations and a relatively conservative outlook, saw the share price take a pause for breath.

"That doesn’t take away from the strategic progress the company has made. Granted greater freedom by its return to full private ownership, the deals to acquire Sainsbury’s Bank and Metro Bank’s mortgage book seem to have gone to plan. The subsequent acquisition of wealth management outfit Evelyn Partners should help the company achieve its aim of increasing the amount of business it does which isn’t tied to the interest rate cycle – an ambition it shares with its peer Lloyds.

"There were no major disappointments in NatWest’s latest results but the exceptionally strong run for the shares in recent years means it is being held to a high standard."

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