Reports

Profits Surge At Coutts, Adam & Co

Tom Burroughes, Group Editor, 30 July 2021

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The headline profit figure was boosted sharply by how provisions for credit losses a year ago swung into a release this year as the conditions around the pandemic improved. Assets under management and administration rose, while lending and deposits also increased, it said.

Profit at Coutts and Adam & Co, the private banking arm of NatWest Group, rose sharply in the first half of this year from a year before. The headline profit figure was boosted sharply by how provisions for credit losses a year ago swung into a release this year as the conditions around the pandemic improved.

Profit stood at £146 million ($203.6 million) in H1, 2021, against £84 million a year earlier, NatWest said in a statement today. 

Total income dipped to £368 million from £392, while operating costs weakened to £249 million from £252 million. The bank logged impairment releases of £27 million in the first half of this year, against provisions for losses of $56 million in H1, 2021.

The cost/income ratio of the private banking business widened to 67.7 per cent in H1 from 64.3 per cent a year earlier, it said. 

Total assets under management stood at £29.9 billion at the end of June this year, up from £27 billion at the end of December. Total assets under administration and management were £34.7 billion, up from £32.1 billion. 

Lending increased by £2 billion, or 13 per cent year-on-year, driven by strong mortgage net new lending performance; deposits increased by £4.9 billion (16 per cent) year-on-year, reflecting commercial and personal inflows in savings and current accounts, NatWest Group said. 

As reported earlier this week, Coutts became the largest UK private bank and wealth manager to be certified as a B Corp, a title showing that it balances financial results while protecting the environment. The status comes at a time when financial groups continue to stress their environmental, social and governance (ESG) credentials.

“New client growth is core to growing a private bank sustainably and it’s therefore pleasing to see more than 30 per cent growth year-on-year in the number of new-to-bank clients too,” Peter Flavel, Coutts chief executive, said. 

“In the first half of 2021 our strong presence in the high net worth lending market has also been reaffirmed with a most pleasing figure of £1 billion of net new lending. Deposit inflows have also been strong at £2.3 billion. 

“We continue to invest in digital solutions, whether operational or product focused to ensure we give the best possible service and opportunities to clients. This is reinforced by the figures which reveal 30 per cent of our net new money has come from digital channels,” Flavel added.

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