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NatWest tumbles to first half loss on pandemic bad loan charge

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 logo of NatWest, a retail unit of RBS, outside a bank branch in London, U.K., on Tuesday, June 26, 2012.

Simon Dawson | Bloomberg | Getty Images

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-capitalized 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.

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