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NatWest tumbles to first half loss on pandemic bad loan charge

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

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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 Group plc

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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)


Copyright (2020) Thomson Reuters. This article was from Reuters and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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