NatWest Group, the FTSE 100 high street lender, reported third-quarter pre-tax operating profit of £2.2 billion, down 2.6% from the second quarter.
Profit for the period fell 3.5% to £1.6 billion from £1.7 billion in the second quarter, and was 3.9% below the same quarter last year.
Impairment losses, the money set aside for loans that may go bad, rose to £277 million from £140 million in the second quarter.
That is 81% higher than the £153 million charged a year ago.
The increase reflected the absence of one-off releases in the second quarter and higher charges on loans in default, known as Stage 3.
Retail Banking's charge doubled to £192 million, partly because the previous quarter included a benefit from an unsecured debt sale.
NatWest said the loan portfolio remained resilient, with an impairment rate of 24 basis points in the quarter and 21 basis points for the year to date.
Total income rose 3.0% on the quarter to £4.6 billion, up 7.1% on a year earlier.
Net interest income, the gap between what the bank earns on loans and pays on deposits, rose 1.8% to £3.6 billion.
The net interest margin edged up to 2.50% from 2.49%, despite a £35 million charge after a review of how customers repay mortgages and credit cards.
Return on tangible equity, a measure of profitability, was 21.6%, against 22.3% a year ago.
Earnings per share were 19.3p, compared with 19.8p a year earlier.
Operating expenses rose 7.1% from a year earlier to £2.1 billion, including £128 million of costs from Evelyn Partners, the wealth manager NatWest bought on 30 June.
The cost:income ratio, which excludes litigation and conduct costs, improved to 45.1% from 45.8%.
Growth and capital
Net loans to customers, excluding central items, grew £8.1 billion in the quarter to £414.3 billion.
Commercial & Institutional, the corporate banking arm, accounted for £6.7 billion of that growth, and its operating profit rose to £1.3 billion.
Customer deposits excluding central items rose £5.8 billion to £453.4 billion.
Private Banking & Wealth Management, which now includes Evelyn Partners, saw operating profit rise to £156 million from £108 million a year ago.
The common equity tier 1 ratio, a key measure of financial strength, rose 30 basis points to 13.5%.
Risk-weighted assets, a measure of exposure to potential losses, rose £1.0 billion to £200.5 billion.
Paul Thwaite, the chief executive, said NatWest had delivered "another strong performance" in the quarter.
NatWest reaffirmed its outlook from the first-half results, and now expects risk-weighted assets of around £210 billion on 1 January 2027, after the impact of new Basel 3.1 capital rules.
It also now assumes the Bank of England will raise base rate by 25 basis points to 4% in the fourth quarter.
The bank bought back a further 24.02 million shares for £155.98 million after the quarter ended.
