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NatWest (NWG.L) beat profit expectations for the first quarter and said it now expected income to be at the upper end of guidance for the year.
In results released on Friday, NatWest reported an operating profit before tax of £1.81bn ($2.4bn), which was up 36% on the same period last year and higher than an anticipated £1.56bn, according to consensus estimates provided by the bank.
Profit after tax for the period came in at £1.34bn, compared with estimates of £1.15bn.
Meanwhile, profits attributable to shareholders of £1.25bn and earnings per share of 15.5p, also beat forecasts of £1.06bn and 13.2p.
Net interest income (NII) — the gap between what it pays out to savers and receives from borrowers in interest — was up 14% to £3.06bn, compared to expectations of £2.99bn.
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Total income of £3.95bn was £80m, or 2.1%, higher than in the fourth quarter, which the bank said was due to deposit margin expansion, lending growth and strong customer activity in trading income.
A £2bn increase in net loans in the first quarter was driven by higher mortgage balances, supported by a faster pace of new lending with consumers looking to complete deals before an increase in stamp duty on 1 April.
NatWest CEO Paul Thwaite said that on the back of a strong first quarter the bank now expected to be at the "upper end of our income and returns guidance for 2025".
This meant the bank now expects income excluding notable items to be at the higher end of its previously guided range of £15.2bn to 15.7bn for 2025.
"In the face of increased global economic uncertainty, our customers remain resilient and we saw good levels of activity through Q1 2025," said Thwaite.
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The bank said that its provisions for expected credit losses (ECL) had increased by £100m to £3.5bn compared with the fourth quarter.
Richard Hunter, head of markets at Interactive Investor, said: "The stars are aligning for NatWest and this latest quarter has added to the growing momentum, prompting another upgrade to its guidance for the full year.
"The imminent removal of the last vestiges of the government stake, which is now less than 2%, will in reality be more of a symbolic move than a turning point," he said.
"Nonetheless the technical overhang of the stake had been a heavy weight on the share price and the group can at last move on. While the shares will likely never recover to the heady levels of almost £64 per share in 2007, that was of course a time when a bloated and overstretched Royal Bank of Scotland very nearly met its end.