BUSINESS LIVE: NatWest posts £3.3bn profit; BA-owner smashes forecasts

The Government must be prepared to ramp-up investment in Britain if the private sector is to back the country and the economy is to thrive, the chief executive of Aviva Investors has told This is Money in an exclusive interview.

Mark Versey, who has led the insurer’s £223billion asset management unit since 2021, also highlighted the importance of rebuilding market confidence in certainty of UK policy after a volatile few years, particularly if the country is to successfully transition to net zero by 2050.

IAG’s quarterly profit beat analyst forecasts by 40 per cent and the British Airways-owner has said it was encouraged by the outlook for the summer as demand for leisure travel remains strong.

The airline group posted an operating profit before exceptional items of €1.25billion (£1.1billion), compared to the €895 million euros analysts were on average expecting.

Luis Gallego, International Airlines Group’s CEO, said:

‘Our strong profits since the start of the year are helping to fund investment for our customers, and to improve our balance sheet by reducing debt.  We are aiming to be back to pre-pandemic capacity at the end of this year.

‘These results are thanks to a strong performance from all companies across the Group, and we would like to thank our teams for their hard work during the year so far.

‘Customer demand remains strong across the Group, particularly for leisure travel, with around 80% of passenger revenue for the third quarter already booked. And our airlines have put in place plans to support operations during the busy summer period.’

The European Central Bank (ECB) raised interest rates to a joint record high – but hinted borrowing costs in the eurozone may now have peaked.

As it continued its fight against inflation, the Frankfurt-based bank pushed rates up by 0.25 percentage points to 3.75 per cent.

That was the joint highest level on record, and on a par with the rate hit in 2001 when it was trying to boost the value of the newly launched euro. The move followed a rise by the Federal Reserve in the US on Wednesday, with the Bank of England set to follow suit next week.

NatWest has posted a pre-tax profit of £3.6billion for the first half of 2023 as the embattled bank, which is currently embroiled in crisis amid the row over Nigel Farage’s Coutts account, benefited from interest rate hikes.

This compared to £2.6billion at the same time last year and beat forecasts of £3.3billion.

NatWest also announced an interim dividend of 5.5p per share and a share buyback of up to £500million for the second half of 2023.