NatWest is driving its costs down by reducing branches, trimming headcount and simplifying operations.
“We incurred higher severance, branch and property exit costs in the first quarter and expect these to be weighted to the first half of the year,” Chief Financial Officer Katie Murray said during the bank’s first-quarter earnings call today. “We will continue our strong track record of disciplined cost management and investment and plan to improve productivity and efficiency through bankwide simplification.”
The $847 billion bank reported operating expenses of 2 billion pounds ($2.4 billion) in Q1, up 5% year over year .
The London-based bank also reported a drop in its headcount of 7% YoY to 61,300 and reported having 19 million customers.
THE BIG PICTURE: Lloyds Bank and Barclays are also trying to reduce expenses.
Barclays said in its Q1 earnings call April 25 that it aims to save $1.3 billion in 2024 through automation and digitalization efforts launched last year. It reported Q1 operating costs of $5 billion, down 3% YoY.
BY THE NUMBERS: In Q1, NatWest reported;
- Net interest income of $3.2 billion, down 8.6% YoY;
- Total income of $4.2 billion, down 10.6% YoY; and
- Total deposits of $524 billion, up 0.2% YoY.
OF NOTE: The bank is working with Amazon Web Services to use the cloud provider’s AI solution SageMaker to provide personalized services to its customers.
FLASHBACK: During its Q4 earnings call on Feb. 16, the bank said that it had saved $315 million a year starting in 2021 through digitalization efforts.
“Since 2021, we have delivered run rate savings of around [$315 million] a year through digitizing customer journeys,” newly appointed Chief Executive Paul Thwaite said at the time. “We continue to simplify journeys across the bank in order to improve customer experience and deliver further savings while streamlining systems and processes.”
[stock_market_widget type=”inline” template=”generic” assets=”NWG” markup=”{name} ({symbol}) is trading at {price} ({change_pct}) as of {last_update}” realtime=”true” api=”yahoo-finance”].
