uk banking group natwest on friday said net profit surged 52 percent in the first quarter from a year earlier with revenue jumping thanks to higher interest rates profit after tax reached £128 billion 16 billion in the januarymarch period income was up 29 percent at £388 billion reflecting higher deposit returns from an improved interest rate environment lending volume growth credit and debit card fees and higher markets income the bank said in a statement rival barclays on thursday posted strong earnings also largely thanks to higher interest rates which attract savers and also increase returns on bank loans central banks worldwide including the bank of england have ramped up borrowing costs in an attempt to cool skyhigh inflation this in turn has led to retail banks hiking their own interest rates on loans including mortgages further fuelling a squeeze on living costs natwest groups strong performance is underpinned by our robust balance sheet our high levels of capital and liquidity and our welldiversified loan book chief executive alison rose said in comments alongside fridays results through a period of significant macro disruption and uncertainty we continue to stand alongside the people families and businesses we serve providing targeted support and growing our lending responsibly she added despite the surge in profits natwests share price slid 55 percent in early trading on londons toptier ftse 100 index which was steady overall richard hunter head of markets at interactive investor noted that the decline of 26 percent in deposit balances is an area of slight disappointment at the same time he added that the rising rate environment has inevitably been positive for income while banks are competing to attract savers by offering higher interest rates many customers are unable to put money away as elevated inflation erodes the value of disposable income the uk government retains a significant stake in natwest after it rescued the bank from collapse during the global financial crisis the lender known at the time as royal bank of scotland received £455 billion of taxpayers cash in the worlds biggest banking bailout at the height of the 2008 meltdown following a lengthy turnaround the government last year cut its stake to below 50 percent for the first time since the rescue