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NatWest Triples Profit in Q3, Reinforces Commitment to Supporting SMB Customers

U.K.’s NatWest Group, formerly The Royal Bank of Scotland, released strong third-quarter results on Friday (Oct. 29) and a number of initiatives supporting small to medium-sized businesses (SMBs).

In terms of headline numbers for the quarter, the Edinburgh-based bank delivered revenue of $4.21 billion and pre-tax operating profit of about £1.1 million ($1.5 million), more than triple the profit it made in the same quarter last year.

Despite the huge jump, the profit figure paled in comparison to the record group pre-tax profit of £6.9 billion ($9.4 million) that rival U.K. Barclays generated during the same period.

Related news: UK Bank NatWest Pleads Guilty in Money Laundering Case

NatWest’s profit came despite the bank having to fork out £294 million ($402 million) in litigation and conduct costs related to charges of breaching U.K. money laundering regulations between 2012 and 2016.

The bank pleaded guilty to the criminal offenses this month and now faces a potential hefty fine of up to £340 million, which could cast a negative light on its Q4 results.

On the upside, income across the U.K. and The Royal Bank of Scotland International (RBSI) retail and commercial businesses increased by 4.4% compared with Q3 2020, and mobile payments increased by 13% quarter on quarter, while retail customers exclusively using digital channels slightly increased to seven million during the quarter.

Banking on SMBs

NatWest, the U.K.’s biggest corporate lender, delivered strong commercial banking performance in Q3 2021, with an operating profit of £625 million ($855.8 million). The results were good news for NatWest Tyl, a merchant-acquiring platform that is designed to make it easier for SMBs to run their businesses online.

The strong commercial banking results mean the bank can continue to scale Tyl to SMB clients, helping businesses reduce their dependence on cash and customer footfall across its branches.

“We have also been investing in technology-led payment solutions for commercial banking customers through [Tyl],” NatWest Group CEO Alison Rose told reporters on an earnings call, adding that “Tyl has processed over 1.5 billion worth of transactions since its inception [in 2019], of which around 500 million took place during the third quarter.”

To support the U.K.’s six million SMBs in addressing climate change, the U.K.-based bank also announced a new £100 billion ($137 million) investment target toward climate and sustainable funding and financing (CSFF) by the end of 2025, having surpassed its previous £20 billion ($27 million) target in the first half of 2021. Part of the new CSFF target will support the U.K.’s transition to a net-zero economy, while helping SMBs in making that transition.

The business bank also unveiled plans to launch a new green loan product for SMB customers, as well as a gender, race and diversity initiative that will see it refocus the majority of its Entrepreneur Accelerator hubs to support fast-growing businesses that are female-, black- and minority ethnic-led, and B Corp-focused.

Read also: NatWest Now Offers Apple Pay to Small Businesses

Back in 2019, NatWest introduced Apple Pay to its one million SMB business banking customers, giving them more options to make payments on the go. The program was extended to all of its business credit card customers last year.

Related news: NatWest Relaunches SMB Accelerator Program

And in April of this year, the group relaunched its SMB Accelerator program, which shifted to a virtual model at the onset of the pandemic, in a hybrid setup to help high-growth businesses “reach this next level of growth and productivity.”

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