The £1.4bn profit came ahead of expectations despite being slightly lower than last year’s £1.6bn pre-tax profit for the same period. Amid the positive results the bank has announced it will pay dividends of 20.3p per share. The news has seen NatWest shares rise by 8% this morning.

NatWest chief executive, Alison Rose, commented: “NatWest Group delivered a strong performance in the first half of 2022, building on two years of progress against our strategic priorities. We are growing our lending to customers and continuing our £3 billion investment programme to create a simpler and better banking experience whilst delivering sustainable dividends and returns for our shareholders.

We know that continued increases in the cost of living are impacting people, families and businesses across the UK and we have put in place a range of targeted measures to support those who are likely to need it most. Our strong levels of profitability and capital generation mean we are well positioned to provide this support.

By building deeper relationships with our customers at every stage of their lives, we will deliver sustainable growth and help them to thrive in a challenging environment.”

John Moore, senior investment manager at Brewin Dolphin, said: “Today’s results from NatWest show the UK’s major banks are, largely, in rude health, buoyed by rising base interest rates.

“An inflation-busting increase to the ordinary dividend combined with a special dividend are positive news for shareholders, as is the intention to repurchase shares from the government at a rate of up to 4.99% every 12 months.

“With the bank simplified, costs in check, and its balance sheet in a strong position, there is an argument for NatWest to do something ‘different’ with the cash at its disposal. Of course, inflation will remain a challenge, but one wouldn’t rule out a strategic acquisition in the near future.”