NatWest recently announced a lesser than anticipated fall in profit of 27% in the first quarter, blaming the competitive environment for savings, lending and mortgage products. The British financial institution posted a pre-tax operating profit of £1.3 billion (€1.5 billion) for the first three months of the year, a reduction from £1.8 billion the previous year, just exceeding market analyst predictions of £1.2 billion.
The bank noted that their income was £406 million beneath that of the same time span last year, partially due to customers moving their deposits to commodities producing higher returns. A change in consumer behaviour, incited by interest rates in the UK increasing in the last two years and public and media focus on the rates banks offer to depositors, has led to customers wisely transferring their funds from low-earning accounts to ones offering better interest rates.
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A major victim of the 2008 financial downturn, NatWest is attempting this year to put an end to the unfortunate saga of its state-ownership since that point as stated by its chairperson. The bank has been re-purchasing its own stocks in the market and the government is contemplating an extra sale to independent investors this year, in order to reduce its less than 29% remaining stakes in the bank.
The possibility of this type of sale seems promising given the bank’s strong recent performance showing resilience in the face of economic bumps in Britain.
The extraordinarily observed indicator of loan losses, impairments, as the UK economy is striving to free itself from stagnation, arrived at £93 million for the quarter, an improvement on the analysts’ prediction of £186 million.