Economic news

NatWest tumbles to 1st half loss on pandemic bad loan charge

LONDON, July 31 (Reuters) - NatWest Group plunged into the red in the first half of the year after setting aside a fresh 2.1 billion pound ($2.76 billion) provision against a potential surge in loan losses due to the COVID-19 pandemic.

The quarterly charge came in above analyst expectations of 1.7 billion pounds, according to an average of forecasts compiled by the British state-backed lender, and pushed provisions for the first six months of the year to 2.9 billion pounds.

NatWest posted a 770 million pound pretax loss for the first half, compared to a 2.7 billion pound profit the previous year.

The newly-rebranded bank - which ditched its Royal Bank of Scotland group name earlier this month - follows rivals Barclays and Lloyds this week in setting aside hefty provisions for potential loan losses.

NatWest remains 62% owned by taxpayers following its bailout in the 2008-09 financial crisis.

The bank said it had lent more than 10 billion pounds of state-backed emergency relief funding to businesses and granted payment holidays to almost a quarter of a million consumers struggling to repay debts.

Chief Executive Alison Rose said the bank was well-capitalised to weather further economic damage from the pandemic.

“We are well placed not only to withstand COVID-19 related impacts but also to provide the right support to those who will need it most in the tough times to come.”

The bank’s core capital buffer - a key measure of financial strength - went up to 17.2% compared to 16.6% at the end of March.

($1 = 0.7618 pounds)

(Reporting by Iain Withers and Lawrence White, editing by Rachel Armstrong)

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree