NatWest's first-quarter profit rises 12%, takes Iran war provision (updated)
01/05/2026 07:21
Adds CEO quote and shares in paragraphs 5-6, details on UK economy paragraphs 7-8, impairment comparison paragraph 10 NatWest upgrades income guidance, expects top end of previous range Bank takes 283-million-pound impairment, 140 million of it linked to Iran war impact Provision mirrors similar charges by Deutsche Bank and Lloyds this week By Lawrence White LONDON, May 1 (Reuters) - NatWest NWG.L reported a 12% rise in first-quarter profit on Friday, as the bank grew lending income while taking a modest charge for potential losses from the impact of the Iran war even as it warned that Britain's economic outlook has darkened. Operating profit before tax for January-March rose to 2 billion pounds ($2.7 billion), up from 1.8 billion pounds in the same period a year ago and just above the 1.9 billion pounds average forecast by analysts. The earnings showed NatWest, like its rivals such as Lloyds Banking Group LLOY.L, so far sustaining a recent robust run of profitability despite concerns about sluggish economic growth and the fallout from the Middle East conflict. NatWest also upgraded its income guidance for the year, saying it now expects it to be near the top of its previously stated 17.2-17.6 billion pound range, even as it cut some of its forecasts for Britain's economy, suggesting tougher times ahead. "We are confident we will achieve our guidance. However, we recognise that market conditions are uncertain and we will refine our internal forecasts as the economic position evolves," CEO Paul Thwaite said in the earnings statement. NatWest shares, which have risen 19% in the last year, slipped 3% in early trading, as investors took in the more bearish economic outlook as well as non-interest income which came in 7% below analysts' forecasts. UK ECONOMIC GLOOM AHEAD The bank said it now expects GDP growth this year in Britain of just 0.4%, down from its previous estimate of 1%, and for the house price index to rise just 0.7% from a previous forecast of 3.4%. The revised forecasts come as fears over rising inflation return, driven by volatility in oil prices and other economic factors exacerbated by the Middle East conflict. Markets expect central banks including the Bank of England to increase interest rates this year. NatWest took a 283-million-pound impairment charge, of which 140 million pounds came from downgrades to its economic forecasts to recognise the impact of the war in the Middle East. That compared with a 189-million-pound impairment charge in the first quarter last year, showing losses broadly in line year-on-year excluding the fresh provision relating to the conflict. That provision follows similar charges taken earlier this week by lenders across Europe including Deutsche Bank DBKGn.DE and Lloyds Banking Group LLOY.L. ($1 = 0.7359 pounds) (Reporting by Lawrence White; Editing by Tommy Reggiori Wilkes and Emelia Sithole-Matarise) ((lawrence.white@tr.com; +44 7788 366940))