NatWest using AI ‘at scale’ to cut £100m from costs – Daily Business

Chair Rick Haythornthwaite and CEO Paul Thwaite

NatWest Group, trading as Royal Bank of Scotland north of the border, said it had generated an additional £100 million in cost savings as it employs AI “at scale” to deliver services.

The company posted a first quarter attributable profit of £1.4 billion, up from £1.25bn in the first three months last year. It expects income be to the top end of its previous guidance.

Following the AGM this week, chairman Rick Haythornthwaite, told Daily Business that AI would be a “jobs changer” not a “jobs destroyer” and would enhance roles in the bank.

In statement with the today’s Q1 figures, the bank said: “We made good progress against our strategic objectives and remain well placed to support our customers through the current macroeconomic uncertainty,” said the bank.

“This reflects our focus on strengthening customer relationships, priority customer segments and deepening customer connections.”

The bank said the cost:income ratio (excluding litigation and conduct) of 46.5% improved 2.1 percentage points compared with Q1 2025.

“This has been driven by ongoing restructuring and increased investment, building on our strong technology foundation and accelerating our use of AI to deliver simpler and better customer experiences in a responsible way.

“We continued to support our customers with improvements to our digital journeys to meet their needs faster and more effectively.”

It added: “Based on our latest expectations for interest rates and economic conditions, we now expect income excluding notable items to be at the top end of our previously guided range of £17.2 – 17.6 billion. Except for this strengthened guidance, we reaffirm the outlook provided in our full year 2025 results.

“We are confident we will achieve our guidance however we recognise that market conditions are uncertain and we will refine our internal forecasts as the economic position evolves.

The RBS-owned bank is in good shape (pic: DB Media Services)

Chief executive, Paul Thwaite, commented: “NatWest Group’s strong performance in the first quarter of 2026 reflects our consistent delivery for customers and shareholders.

“Total income excluding notable items of £4.2bn and an operating profit of £2bn have both increased compared to Q1 2025, with a return on tangible equity of 18.2% continuing our track record of delivering attractive returns.

“Having raised our ambitions in February 2026, we have continued to make good progress against our strategic priorities in Q1 2026.

“We have started the year with positive momentum, underpinned by healthy customer activity – growing all of our three businesses, expanding our capabilities to meet more of our customers’ needs and further improving productivity as we use AI at scale across the bank.

“The strength of our balance sheet, scale of our business and depth of our long-standing relationships mean that we can provide the funding, advice and expertise our 20 million customers need in order to navigate increasing uncertainty and to achieve their goals.”

Nick Sherrard, managing director of Label Sessions, said: “This is the first quarterly read on a fully private NatWest. If today’s results are indicative of what’s to come, then the bank has a bright future ahead of it – particularly with income topping expectations and strengthened guidance in the near term.

“But, the bank should feel that some of the opportunities currently open to it are urgent. It now has the capital position, the simplified estate and a rebuilt technology core to make a real move. 

“Especially after the Evelyn Partners deal, NatWest is well placed to build a retail bank where wealth, lending and everyday banking feel like a single connected service.

“Achieving that would be great for customers and the business, but doing so will be a real test of culture and leadership for the bank in its new era.”

Chris Beauchamp, chief market analyst at investing and trading platform IG, was less encouraged by the statement.

“NatWest, like other UK banks, has been the gift that kept on giving over the last two years, but now with the shares trading at such an elevated level results like today aren’t enough to drive further upside.

“While the figures are in line with Lloyds’, the outlook is now tied to the broader UK economy, and on this front the picture seems set to get worse before it gets better, particularly if the doom-laden ‘Scenario C’ outlined by Andrew Bailey yesterday comes to pass.”

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