NatWest has eliminated approximately 1,400 jobs this year as the banking group accelerates a sweeping cost-cutting programme, despite reporting stronger profits and rising income from lending.
The FTSE 100 lender said quarterly pre-tax operating profits reached £2.2bn in the three months to September, an increase of about 2 per cent on the same period last year.
Around 1,000 full-time positions were removed during the quarter alone, underlining the pace of the restructuring as chief executive Paul Thwaite seeks to build a leaner, more technology-focused bank.
NatWest said the programme had already delivered approximately £420mn in cost savings, helping reduce the proportion of revenue consumed by operating expenses.
Its cost-to-income ratio fell to 45.7 per cent for the year so far, highlighting the financial benefits of efforts to streamline operations.
The bank is also benefiting from stronger income generated by its lending business. Net interest income climbed almost 9 per cent year on year to approximately £3.6bn during the quarter, reflecting the difference between interest earned on loans and paid to depositors.
However, NatWest’s restructuring has coincided with an expansion elsewhere in the business. Its acquisition of wealth manager Evelyn Partners added approximately 2,200 employees, pushing overall headcount higher despite the redundancy programme.
Technology investment, including artificial intelligence, is becoming increasingly central to the bank’s efficiency strategy. NatWest has been trialling an AI-powered spending insights assistant and a fraud detection agent for credit card customers, as lenders seek to automate services and reduce operating costs.
The bank is not alone in benefiting from stronger interest income, with rivals Lloyds and Barclays also reporting robust revenues from their banking operations.
Thwaite said NatWest continued to see growth across its customer businesses.
“As we help more customers to save and invest, buy a home or expand their businesses, we continue to see broad-based growth in our three customer franchises,” he said.
For NatWest, the challenge is to convert its growing investment in technology and restructuring into lasting improvements in profitability, while maintaining customer service and managing the consequences of a shrinking workforce.
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