Digital switch accelerates as NatWest RBS profits rise
Alison Rose: digital transition is accelerating
NatWest Group, trading as RBS in Scotland, said the transition to digital banking has accelerated during lockdown as customers sought new ways to interact with the bank.
Digitally active customers are up 1% in the first quarter to 9.5m and 9% on FY ’19 across retail and business banking.
The bank said 61% of retail customers now only use digital to interact, up from 58% at FY ‘20 and 50% at Q1 ’20.
The data emerged as the bank reported a doubling of attributable profit in the first quarter (+115%) from £288m to £620m. Operating profit before tax rose 82% from £519m to £946m.
Commenting on the shift towards digital banking, chief executive, Alison Rose, said in a media conference call: “Some of this was circumstantial through the lockdown.”
She added that customers were adopting a range of new ways of interacting with the bank, including video, which in many cases was a way of avoiding long journeys.
Ms Rose also reaffirmed that should Scotland vote for independence the bank would be likely to switch its registration to England. This is because the bank’s balance sheet would be too large for Scotland to support in the event of another financial crash.
Ms Rose was echoing a position first outlined by former chairman Sir Philip Hampton ahead of the independence referendum in 2014 and repeated by current chairman Sir Howard Davies.
In her statement on the figures, Ms Rose said: “NatWest Group’s profit in the first quarter of 2021 is a result of a good operating performance in our core franchises as well as modest impairment releases that reflect the better than expected performance of our loan book across the first three months of the year.
“We continue to make progress against our strategic targets; growing in key areas, simplifying the bank and accelerating our digital transformation to meet the rapidly evolving needs of our customers.
“We are also pleased that we were able to use some of our excess capital to buy back shares from the UK Government.
“Defaults remain low as a result of the UK Government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased.
“However, there is continuing uncertainty for our economy and for many of our customers as a result of COVID-19. Our capital strength and well-diversified balance sheet means NatWest Group is well positioned to help people, families and businesses to rebuild and thrive.
“We are building a relationship bank for a digital world. A bank that champions potential and plays a positive role in society in order to build long-term value and drive sustainable returns for our shareholders.”