LONDON (Reuters) – NatWest Group (L:) plunged into the red in the first half of the year after setting aside a fresh 2.1 billion pound 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 (LON:) and Lloyds (LON:) 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 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.
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