Live updates: NatWest chief sees ‘strong’ demand for mortgages despite soaring inflation and rising rates

Alison Rose, CEO of NatWest © Bloomberg

Alison Rose, chief executive of NatWest, said demand for mortgages “continues to be strong” and there were no “signs of stress” in the bank’s mortgage portfolio.

Speaking at Goldman Sachs’ European financial conference on Thursday, Rose said the state-backed bank’s mortgage business was growing despite rising interest rates and inflation.

However, she said there was an “uptrend” in favor of five-year fixed-rate mortgages as more borrowers sought to lock in rates for longer.

“The demand for mortgages in the UK continues to be strong, we continue to see good growth there,” she said. “I don’t see any signs of stress in our book, either in terms of actual stress or early warning indicators.”

Rose said warning signs include an increase in revolving credit facilities, greater use of overdrafts or higher call volumes to financial support lines.

She said NatWest was “conscious” of inflation and was considering rising cost of goods in its affordability calculators for mortgages.

Rose also noted that NatWest has “significant excess capital” and would consider acquisitions. The lender has a Tier 1 common equity ratio – a measure of a bank’s reserve strength – of 15.2%.

“I’ve been very clear that my preference is to distribute capital to shareholders,” Rose said.

“I also said that we would consider mergers and acquisitions if it would generate attractive shareholder value and if our business continued to generate capital.”

She said there was an opportunity to grow retail, particularly in the credit card market, as well as the division of wealth through acquisitions.

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