NatWest posted annual pre-tax profits that jumped 20% to £6.2bn due to high interest rates, its largest profit since 2007.  

The high street bank says: “Retail banking mortgage lending increased by £5.9bn, with gross new mortgage lending of £29.8bn in 2023 compared with £41.4bn in 2022, reflecting the smaller mortgage market.”  

It adds: “High interest rates significantly impacted the housing and mortgage market in 2023.”  

The Bank of England base rate is currently at a 16-year high of 5.25% as the central bank battles inflation at 4%. 

However, higher interest rates served to lift NatWest’s revenues and saw its net interest margin – the difference between what it takes in from borrowers and what it pays to savers – rise by 19 basis points to 3.04% compared to a year ago.    

“Personal lending grew as a result of strong demand across both mortgages and unsecured lending, although mortgage demand reduced during the second half of the year in line with trends in the UK mortgage market,” the bank says in a stock market statement.  

The group – which includes Royal Bank of Scotland, Ulster Bank and Coutts — named Paul Thwaite as its permanent chief executive.  

He succeeds Dame Alison Rose who resigned last year in the wake of the Nigel Farage bank account scandal.  

Thwaite says: “This year we are focused on the things we can control — delivering profitable growth, becoming more efficient, more productive, and simpler to deal with, while managing our cost and capital efficiently.”  

The bank is preparing for a potential sale of its shares to the general public, which reports suggest may come in June.  

The government owns 35% of the bank after a £46bn bailout during the financial crisis.