- NatWest expects losses of 140 million pounds due to the war in Iran.
- The bank reported operating profits of 2 billion pounds for the first quarter.
- Economic forecasts predict rising inflation and slowing growth for the UK economy.
NatWest reported operating profits of 2 billion pounds for the first three months of the year. This represents a 12 percent increase from the 1.8 billion pounds earned previously. These results surpassed the average analyst expectation of 1.9 billion pounds for the period.
Despite strong profits, the lender faces a 140 million pound hit from the Iran war. The bank recorded a total impairment charge of 283 million pounds. Nearly half of this sum stems from weaker equity markets and heightened geopolitical risks.
The bank predicts UK GDP growth will be only 0.4 percent this year. This estimate is half of the figure provided by the IMF. NatWest also expects unemployment to climb to 5.5 percent, while inflation may reach 3.5 percent.
NatWest believes the Bank of England will keep the 3.75 percent base rate until 2030. However, the market expects two rate hikes this year. The Bank of England previously warned that higher inflation is unavoidable due to Middle East conflict.
Read also: Football : Hull could face a points deduction while competing in the Premier LeagueHousing market predictions show a 0.7 percent rise this year. However, the bank forecasts a 1.8 percent contraction next year. A further 0.5 percent decrease is expected by 2028 as economic conditions shift across the country.
Overall income is projected to be between 17.2 billion and 17.6 billion pounds. This occurs as banking industries benefit from market turbulence. Meanwhile, Lloyds Banking Group forecast 0.5 percent GDP growth and took a 151 million pound charge.
