Coronavirus: NatWest sees red after hiking provision for bad loans to £2.8bn
31 July 2020, 07:21 | Updated: 31 July 2020, 08:22
NatWest plunged into the red in the first half of the year after hiking its provision for loan losses caused by the coronavirus pandemic to £2.8bn.
The bank has set aside a further £2.1bn to cover a threatened surge in bad debts due to the COVID-19 crisis - far higher than even the most pessimistic forecasts from analysts, which predicted a £1.5bn hit.
The charge pushed the group to a pre-tax loss of £770m, compared with a £2.7bn profit the year before.
The newly rebranded bank - which ditched its Royal Bank of Scotland group name earlier this month - follows rivals Barclays and Lloyds this week in earmarking hefty provisions for potential loan losses as a result of the coronavirus emergency.
NatWest remains 62% owned by taxpayers following its bailout in the 2008-09 financial crisis.
The bank said it had lent more than £10bn 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: "Our performance in the first half of the year has been significantly impacted by the challenges and uncertainty our economy continues to face as a result of COVID-19.
"However, NatWest Group has a robust capital position, underpinned by a resilient, capital-generative and well-diversified business.
"Throughout this crisis we have provided exceptional levels of support to our customers, colleagues and the communities we serve.
"I am proud that our colleagues have consistently shown they are putting our purpose at the heart of everything they do."
She added: "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.
"Our purposeful strategy will help our customers, colleagues and communities to recover, rebuild and, ultimately, to thrive.
"We are building a sustainable business that will generate lasting value for all our stakeholders, as we work together to create a greener, fairer and more inclusive economy."
The bank's core capital buffer - a key measure of financial strength - went up to 17.2% compared with 16.6% at the end of March.
(c) Sky News 2020: Coronavirus: NatWest sees red after hiking provision for bad loans to £2.8bn