NatWest boss Paul Thwaite warned of a ‘pause in activity’ among some of Britain’s biggest firms as Donald Trump’s trade war hammers confidence.
The comments came as the bank reported a 36 per cent rise in profit to £1.8billion for the first quarter but acknowledged that the upheaval over tariffs is taking its toll.
Thwaite said: ‘There is no doubt that global economic uncertainty has increased and there has been a dip in confidence across both businesses and households.’
It was the latest in a series of warnings from bank bosses this week that they are steeled for turbulence after Trump’s ‘Liberation Day’ announcement last month, which threatens to up-end global economic networks built up over decades.
The chairman of HSBC yesterday warned that it created ‘serious potential risks to global growth’ while Standard Chartered flagged a ‘more fragmented’ global outlook.
Thwaite said the impact on customers varied according to circumstances and there were also ‘positive’ indicators with arrears low and corporate and household borrowers ‘resilient’.
But he added: ‘For larger corporates, that are more exposed to global trade… there is certainly some pausing of activity, with many in wait and see mode.
‘Smaller businesses and consumers tend to be more focused on the domestic agenda and we haven’t yet seen any significant changes in behaviour across these groups in response to recent volatility.
‘The reality is, certainly for those exporting or who are heavily dependent on international trade, the uncertainty means they’re taking stock, they’re waiting and seeing. That manifests primarily around investment decisions and any thoughts they might have been having around corporate finance activity.’
For the first quarter, NatWest was boosted by a surge in mortgage lending thanks to borrowers racing to complete house purchases before the stamp duty went up at the start of April.
It now expects to deliver income and returns for the year at the ‘upper end’ of its guidance. Shares rose 1.3 per cent, or 6.2p, to 482p.
NatWest is preparing to return to full private ownership for the first time since it was bailed-out by taxpayers in 2008. Earlier this week, the Government’s stake in the lender fell below 2 per cent.
HSBC chairman Sir Mark Tucker warned over the trade war as he addressed its annual general meeting yesterday.
‘The overarching impact of the changing approach to global trade relations has been to increase economic uncertainty with serious potential risks to global growth,’ he said.
And Bill Winters, boss of Standard Chartered, said the tariffs had ‘increased global economic and geopolitical complexity’.
The bank reported a 10 per cent rise in first-quarter profits to £1.6billion.
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