This strong performance comes despite a challenging UK economic outlook and follows a trend of positive results from other major UK banks.

The bank’s success is attributed to increased lending and deposits, as well as a robust net interest margin. Notably, NatWest managed to avoid significant deposit outflows, which have impacted other lenders recently.

NatWest Group chief executive, Paul Thwaite, said: “The strength of NatWest Group’s performance is underpinned by the support we provide to our 19 million customers in every nation and region of the UK. By continuing to deliver against our strategy, we are growing and simplifying our bank whilst managing our capital more efficiently.

“As the UK’s biggest bank for business, and one that serves millions of households, NatWest Group plays a key role in driving economic growth across the UK.

“Throughout the third quarter of 2024, we have grown our lending, helping customers to buy or remortgage their homes or to start and grow their businesses.

“With customer activity increasing, defaults remaining low and optimism amongst businesses and consumers, we are well placed to succeed with our customers and for our shareholders in the months and years ahead.”

AJ Bell investment director Russ Mould commented: “It has been a pretty decent earnings season all-round for the UK banking sector and the positive trend continued with NatWest’s numbers.

“Better-than-expected income and lower-than-expected costs provided the cocktail for upgrades and investors have responded accordingly. The company, and its peer group, have been helped here by slower-than-anticipated rate cuts. 

“NatWest is keeping the lid on the longer-term outlook for returns, which looks like good expectations management and potentially an eye to the fact that targeting returns which are too high might draw the ire of politicians and regulators.”

He added: “The company is well on the way to being fully restored to private ownership with the remaining 15% government stake likely to be sold down in the coming months, which would remove a material factor overhanging the shares and represent a significant milestone for the business.

“One fly in the ointment was higher than expected impairments – running counter to what Barclays and Lloyds announced earlier this week – but for now the level of impairments looks manageable.

“The company’s move to buy Metro Bank’s mortgage book in July demonstrated CEO Paul Thwaite isn’t prepared to sit on his hands and it will be interesting to see how the strategy develops, particularly once the state’s holding in the bank has been fully erased.”