NatWest Group has reported attributable profits of £841m during the first quarter of 2022, compared to £620m year-on-year.
Operating profits before tax were even higher at £1.24bn, compared to £885m during the first quarter last year.
The trading update also showed a reduction in impairment charges, at £38m, compared to a £98m release during the first quarter of 2021, out of £3.2bn held back at the start of the pandemic. This reflected low levels of realised losses across the portfolio, although "the economic outlook remains uncertain".
Costs were also reduced by 4.6% year-on-year, or £78m.
In terms of capital returns, a £1.2bn directed buy-back was completed in March, reducing the banking group's government stake to around 48%.
A minimum £1bn annual dividend is now in place for 2022 and 2023, with £335m executed to date of an £750m on-market buy back.
Group income, excluding notable items, increased by £219m, or 8.6%, compared with the first quarter of 2021, principally reflecting volume growth and favourable yield curve movements.
Net lending increased by £6.7bn to £359bn quarter-on-quarter, principally reflecting retail banking mortgage growth of £2.6bn and a £2.4bn increase across commercial and institutional divisions.
Customer deposits rose by £4.2bn in the quarter to £465bn.
Updated forward-looking guidance now puts 2022 income "comfortably above" £11bn.
Chief executive Alison Rose commented: “The world has changed considerably during the last three months.
“Our thoughts are with everyone affected by the invasion of Ukraine and we are doing all that we can to support them; we are also very aware of the challenges and concerns the cost-of-living crisis is causing for many of our customers up and down the country.
“Despite the challenging environment, I am pleased with our performance as we continue to execute well against our strategy, driving sustainable growth and returns.”
Rose said that the group was supporting humanitarian efforts in Ukraine with £2.5m in matched donations, while help is being given to refugees opening bank accounts in the UK.
During the Annual General Meeting yesterday afternoon, NatWest chair Howard Davies apologised to shareholders for failing to prevent money laundering at the group between 2012 and 2016.
He also warned that inflation looks set to rise, with the war in Ukraine likely to impact energy and food bills further.
NatWest was fined £264m after pleading guilty last year over breaches of anti-money laundering regulations.
Davies told shareholders: “NatWest Group takes its responsibility to prevent and detect financial crime extremely seriously.
“We deeply regret that we failed adequately to monitor one of our customers between 2012 and 2016 to prevent money laundering.
“And while the case has now come to an end, we continue to invest significant resources in the ongoing fight against financial crime and fraud.”
His apology comes as the chairman warned the upcoming year would be difficult for customers with the cost-of-living crisis.
He said: “Inflation, which was already on a steep trajectory at the end of 2021, looks set to continue to rise as the reverberations from the invasion of Ukraine have a direct impact on prices – especially of energy and commodities.
“We are very conscious of the effects this will have on the increased cost of living for many of our customers, and we are committed to helping them where we can.”
Rose also warned on rising inflation and said the bank was increasing efforts to support UK families and businesses.
“We are not seeing any significant signs of financial distress in our book at this stage - we are, however, very aware of the challenges and concerns the cost-of-living crisis is causing for many of our customers up and down the country.
“Therefore, in line with our approach throughout the pandemic, we are focussed on providing the practical help and support that people, families and businesses need to thrive.”
The boss explained this would include financial health checks and support for small and medium-sized businesses to manage their finances.
Prior to voting on resolutions, there were several questions from investors, including comments regarding plans for share-buybacks, how quickly higher interest rates would be passed on to customers and ethnicity pay gaps.
Shareholders voted in favour of all resolutions put forward at the annual general meeting, although the re-election of Frank Dangeard, NatWest Market’s chairman, received only 56%.
Investors are said to be unhappy with the large portfolio of boards Dangeard now sits on.
The board avoided a shareholder rebellion, despite calls by investor groups to oppose a new pay policy that could see Rose receive as much as £5.2m a year.
The policy will increase her potential bonus payouts by 25%, and result in a 43% rise for chief financial officer Katie Murray, by 2023.
NatWest said it would bring executive pay closer to levels offered by rival UK banks.
A resolution asking shareholders to back a climate strategy, which NatWest said would help it align with the 2015 Paris Agreement, was also passed.
Under the new strategy, the group will publish a transition plan, and will try to halve the climate impact of the things it finances before the end of this decade.
Last November, the bank stopped lending to new coal projects around the world, but said it would continue to work with oil and gas companies, as long as they had plans to transition their business.
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