The bank also set aside close to £300 million to cover its guilty plea in a money laundering case.
NatWest was unable to cross the hurdles that the market had set for it despite shooting through expectations in the third quarter of the year.
Following strong results from its peers, the bank did not impress shareholders with a pre-tax operating profit that was nearly 60% higher than analysts had predicted.
Shares in the company dropped by 4.5% as markets opened on Friday, despite these seemingly strong results.
“NatWest’s share price has been a notable outperformer so far this year, its shares up over 35%, and at 20-month highs, so the bar was quite high for today’s … numbers, and quite frankly the market reaction has been a little underwhelming, with the shares dropping to the bottom of the FTSE 100.”
Over the last three-month period the bank made an operating pre-tax profit of £1.1 billion, up from just £355 million a year earlier, and higher than the £677 million that analysts were expecting.
Total income grew 14% to nearly £2.8 billion, around £150 million more than predicted.
Chief executive Alison Rose said: “Although we are seeing challenges in the economy and for our customers – especially around supply chains and the cost of living – a number of key indicators remain positive; growth is good, unemployment is low and there are limited signs of default across our book.
“We have a vital role to play in helping the 19 million people, families and businesses we serve in communities throughout the UK to thrive. Because when they thrive, so do we.”
The bank’s profits were boosted by its decision to unlock £242 million that it had set aside during the pandemic to cover loans that might go sour.
But it has also set aside £294 million to cover a potential fine for breaking money laundering rules.
Earlier this month it pleaded guilty to failing to prevent the laundering of nearly £400 million.