NatWest Group reported a £2.2 billion ($2.95 billion) quarterly operating pre-tax profit while cutting about 1,000 full-time jobs, highlighting the contrast between the bank's rising earnings and shrinking workforce as it invests in technology, including artificial intelligence.
Here's what to know
The banking group's profit for the three months to September rose about 2% compared to the same period a year earlier, according to The Independent.
Net interest income — the difference between earnings from loans and interest paid on deposits — increased nearly 9% to around £3.6 billion ($4.8 billion).
The quarterly staffing cuts brought the year's job losses to 1,400.
However, the bank's acquisition of wealth manager Evelyn Partners added around 2,200 employees, increasing its overall headcount despite reductions elsewhere in the business.
Whether more cuts would follow was a question NatWest chief executive Paul Thwaite declined to answer.
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"The first people to hear about that would be our colleagues," he hedged, per The Independent.
More background
Lloyds and Barclays are among the other high street lenders reporting increased income, according to The Independent.
NatWest's earnings growth comes against the same backdrop of persistently high interest rates.
The bank's customer spending data, meanwhile, pointed to growing pressure at the fuel pump, even as people continued spending on vacations and related expenses.
According to NatWest data, annual fuel spending per customer was up 20% despite a 10% drop in gallons purchased, The Independent reported.
"We can see strong spending on travel, holidays, and accommodation. On the flip side, fuel prices are very obvious and major pressure points — people are spending more and buying less," Thwaite observed.
NatWest indicated that its lending book also grew in the third quarter as mortgage balances increased, according to The Independent.
Remortgaging accounted for the increase, while demand among buyers declined modestly.
What's being done?
NatWest reported around £420 million ($563 million) in cost savings as it continued its push to become a simpler, technology-driven business.
Investment in technology contributed to those savings. Its year-to-date cost-to-income ratio — operating expenses as a share of income — fell to 45.7%.
The bank has trialed tools offering spending insights and fraud assistance to credit card customers. The report did not provide measured results showing how much either trial helped customers.
For Thwaite, efficiency was only one part of the technology's purpose.
"The way that we're using AI is for the benefit of our customers and for the benefit of our colleagues … so from that perspective, it is pretty universal," he stated.
According to Thwaite, AI is reshaping existing jobs as well as creating new positions focused on the technology.
Thwaite framed the workforce changes around matching people to jobs.
"It's important we've got the right skills, the right individuals in the right roles."
Where can I learn more?
Banks are far from the only employers cutting jobs or investing in AI. These stories cover layoffs at Kroger and Netflix, along with allegations about Amazon's AI use to fight unionization.
• Kroger plans 3,000 corporate job cuts as its new CEO pushes AI adoption.
• Netflix workers criticized layoffs alongside Ben Affleck's nearly $600 million AI deal.
• Amazon faces accusations of using AI to rank warehouses by union risk.
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