The bank said operating profit before tax reached £1.1bn, a rise from £355m the year before. Analysts had expected the figure to reach just £677m.
NatWest took a £294m litigation and conduct charge, which includes a provision for an anticipated fine after pleading guilty this month to failing to prevent the laundering of nearly £400m between 2012 and 2016.
The bank said it would not disclose the exact provision for the fine, which will ultimately be determined at a sentencing expected in December, as court proceedings are ongoing.
NatWest's profit rise follows bumper quarterly earnings from rivals Barclays, HSBC and Lloyds this month, as Britain's economic rebound from pandemic lockdowns boosted profits. All were lifted by the release of bad loan reserves, with NatWest releasing £242m that it had set aside during the pandemic in case borrowers were unable to pay back their loans.
It made revenue of £1.8bn.
NatWest's 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.
“NatWest Group has made addressing the climate challenge and supporting our customers through the transition a key strategic priority.
“We recently announced a new target to deliver an additional £100bn of climate and sustainable funding and financing by the end of 2025, having exceeded our initial two-year target of £20bn in less than 18 months.”