Natwest Group (LON:NWG) slumped to a half-year loss of £770mln as it took charges for loan impairments of almost £2.9bn and warned that the total charge for the year might rise to £4.5bn.
Like other banks that have reported results this week, the former Royal Bank of Scotland said the bad debts have arisen from the impact of coronavirus on the UK economy.
“What the final bill is will depend on ‘the effectiveness of government support schemes in delaying and reducing the level of economic distress experienced by our personal and commercial customers,’ the FTSE 100-listed lender said in its results statement.
“We believe the full year 2020 impairment charge is likely to be in the range of £3.5-4.5 billion,” it added.
Without the bad debt charge, Natwest posted an operating profit of £2.1bn for the six months to June 2020.
A strong performance from investment banking helped the interim numbers. NatWest Markets’ income increased by 44.4% ignoring one-offs and in contrast to the retail and commercial arms, which declined by 9%.
Alison Rose, NatWest’s chief executive said the bank had a robust capital position, ‘underpinned by a resilient, capital generative and well-diversified business’.
“Through our strong balance sheet and prudent approach to risk, 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,” she added.
The bank said that having been asked to suspend dividend payments by its regulator, it would continue to review the situation and will look to resume distributions to ordinary shareholders in due course.
Published at Fri, 31 Jul 2020 06:32:00 +0000-Natwest Group posts £770mln loss after huge bad debt hit from coronavirus impact