NatWest Group takes £2.1 billion hit from the coronavirus pandemic

NatWest Group, formerly the Royal Bank of Scotland, has revealed an almost £2.1 billion hit from the coronavirus pandemic, far higher than even the most pessimistic forecasts from analysts.

The bank’s impairment charge for the second quarter of the financial year, which is set aside to cover bad debts, pushed it to a pre-tax loss of £770 million, compared to a £2.7 billion profit the year before.

Analysts had on average expected to see a £943 million impairment charge in NatWest’s books. The most pessimistic analyst had predicted a £1.5 billion hit.

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.

“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.”