NatWest Group posts drop in 1H operating profits

(Sharecast News) - NatWest Group posted a decline in interim profits as net interest margins fell and costs rose.

During the first half of its fiscal year, NatWest Group posted a decline in operating profits before tax of 15.6% to reach £3.03bn.

Net interest margins fell by 16 basis points to 2.07%, but improved by 5bp in the second quarter to 2.1%.

In parallel, the cost-to-income ratio worsened from 49.3% to 55.5% during the half.

Returns on tangible equity declined from 18.2% one year before to 16.4%.

Levels of default remained stable and at low levels across the portfolio, according to the lender.

The loan impairment rate was down by nine basis points at the half-year stage.

Management said that it now saw full-year income, excluding notable items, of approximately £14bn and expected the lender's return on tangible equity would increase to over 14%.

The interim dividend payout was hiked by 9% to 6p.

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