NatWest, trading as Royal Bank of Scotland north of the border, posted profit ahead of expectations in the third quarter and raised its guidance for the year.

Net income was better than forecast and its net interest margins – a measure of the profitability of lending – also increased in the quarter.

Customer deposits grew with good performance across divisions, notably in savings.

Operating profit for the period came in at £1.7bn against £1.3bn last year. Over nine months it fell to £4.7bn from £4.9bn.

Attributable profit over the quarter rose to £1.2bn from £866m and was also up to £3.3bn over the nine-month period from £3.2bn. 

The cost-income ratio over nine months rose to 52.8% from 49.9%, reflecting a rise in costs over income.

Income for the year is now expected to be around £14.4bn, up from previous guidance of around £14bn. 

Further selling of government stock means the taxpayers’ holding is now below 16% from 38% in December.

Chief executive, Paul Thwaite, said:  “Throughout the third quarter of 2024, we have grown our lending, helping customers to buy or remortgage their homes or to start and grow their businesses.

“With customer activity increasing, defaults remaining low and optimism amongst businesses and consumers, we are well placed to succeed with our customers and for our shareholders in the months and years ahead.”

Speaking to the media, he said he hoped the Budget next week “supports the unlocking of growth and investment across the nations and regions of the UK.”

He said some of the topics being spoken about, such as housing and the green transition “are areas that we are able to help towards to drive growth.”

On the accelerating sale of taxpayer-held shares he said this was “testament to the strength of the bank”.

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