NatWest ‘proving the doubters wrong’ as profits jump almost a third to £2.2 billion
“This is another reminder that UK-focused banks are quietly performing better than many give them credit for” – Matt Britzman, Hargreaves Lansdown
NatWest Group is “proving the doubters wrong” after seeing its profits jump 30 per cent in the third quarter as it continues to focus on cutting business costs.
The banking giant, formerly known as Royal Bank of Scotland Group, reported a pre-tax operating profit of £2.2 billion for July to September. This was a leap from the £1.7bn made in the same period last year, and significantly ahead of the £1.8bn expected by analysts.
Total income generated by the group jumped by 16 per cent in the third quarter, compared with the previous year, while lending grew including for mortgages. At the same time, the bank brought down its expenses in previous months which helped lower its cost-to-income ratio. This means it is spending less on running the business, as a percentage of the amount it generates in income.
NatWest, which also includes Ulster Bank, said it has been focusing on becoming a more efficient bank and simplifying its operations, which it hopes will save it money in the long run. It revealed that about 600 roles were reduced across the business compared with the previous year.
Chief executive Paul Thwaite said: “NatWest Group delivered another strong performance in the third quarter of 2025, underpinned by healthy levels of customer activity and the continued support we provide to them.
“With our strategic focus on growth, NatWest Group’s impact can be felt right across the economy, as we help people get on the housing ladder, save and invest for the future and grow their businesses.
“We are also becoming a much simpler bank, with tight control of costs supporting our digital transformation that is enabling us to anticipate and meet the changing needs of customers at pace.”
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Matt Britzman, senior equity analyst at investment platform Hargreaves Lansdown, said the bank was “proving the doubters wrong” with its latest set of numbers.
“The good news was broad-based: revenues were higher, costs were lower, and even loan impairments came in better than feared,” he noted.
“This is another reminder that UK-focused banks are quietly performing better than many give them credit for. Lloyds showed similar resilience recently, though its motor finance charge muddied the picture. Strip out the noise, and both lenders are proving they fully deserve their improving valuations.”
Richard Hunter, head of markets at Interactive Investor, described the third-quarter results as a “sparkling set of numbers by any standards”.
He added: “As far as investors are concerned, NatWest is in a sweet spot. The government shackles have gone, the group has prodigious amounts of cash and acquisitions to boost growth further seem likely.
“Indeed, it remains to be seen whether this new-found freedom will enable a more aggressive acquisition policy, with NatWest already having made what it described as two significant purchases in the form of Metro Bank’s mortgage book and Sainsbury’s Bank and reportedly having been rebuffed in an approach for Santander’s UK operation.
“There is almost nothing of note for the bears to feed on from these results and the reaction at the open is one of warm appreciation.”
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