NatWest earnings soar 30% as it takes ‘tight control’ over business costs

Russ Mould, investment director at AJ Bell, said: “Being fully privately owned seems to be suiting NatWest, with the company’s third quarter update the latest in the sector to help ease concerns about contagion from US private credit issues.

“Traditional lending activities – in both the mortgage and corporate market – helped the company to beat quarterly profit forecasts by an eye-catching amount and have seen guidance for the full year on income and returns nudged higher.

“NatWest has also managed to keep a tight rein on costs which has helped amplify its strong underlying performance.

“Full privatisation should give the business a freer hand and CEO Paul Thwaite has already gone on the record about the potential for further M&A – after buying a majority stake in Sainsbury’s Bank and a part of Metro Bank’s mortgage book last year.

“Having apparently failed with an £11 billion bid for Santander’s UK operations and looked at TSB before Santander itself took it over, investors will be expecting a major deal from NatWest at some point.

“While this may generate excitement it could also engender some nervousness among investors with longer memories given previous acquisition sprees did not necessarily end well for NatWest in the past.”