Natwest has posted strong growth and has returned to profitability and posted £2.9bn – compared to 2020 losses of £753m.
Lending grew by £7.8bn in 2021 thanks to strong growth in mortgages.
Chief executive Alison Rose said: “NatWest Group delivered a strong performance in 2021 as we returned to profitability, made progress against our strategy and distributed more than £3.8 billion of capital to our shareholders, including £1.7 billion to the taxpayer,”
“We are acutely aware of the challenges that many people, families and businesses continue to face up and down the country and are working alongside our customers to provide the support they need – whether that is managing their money better, saving for a house or retirement or starting or growing a new business – as well as playing a leading role in the transition to net zero,”
Shareholders will receive 7.5p per share.
Despite the boost in profits, analysts highlighted concerns some investors may have about the cost of living crisis and the impact on household debt, and the ability to service that debt.
“Expectations are set pretty high for the UK banks heading into their latest reporting season and this helps explain why, despite a return to profit and otherwise pretty positive update, Natwest got us off to a subdued start in terms of its share price,” said AJ Bell financial analyst Danni Hewson.
“After all the banking sector is one of the few industries which will be waving flags and cheering as interest rates are increased as it allows them to generate a higher return from their lending activities.”
“The better than expected earnings and hike in the outlook were, to some extent, baked in, and investors may be concerned about the possibility of an increase in bad debts as its customers face a cost of living crisis. This could outweigh any boost to profitability from higher rates.”
