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NatWest swings to profit in Q3 2020

Paloma Kubiak
Written By:
Paloma Kubiak

NatWest reported operational profit of £355m in the third quarter of the year, beating market forecasts of a £75m loss.

Profit before tax of £355m was reported in Q3 2020, but attributable profit stood at £61m in the same period.

This figure was helped by a lower than expected impairment charge of £254m, after it forecast impairment losses of £628m.

Gross new mortgage lending was £6.7bn in Q3 2020, while customer deposits increased by £3.9bn, compared with an £8.2bn increase in Q2 2020. This is said was predominantly driven by increasing current account balances but growth slowed in the quarter as customer spending increased back to levels seen pre-Covid.

NatWest helped an estimated 250,000 customers with an initial mortgage payment holiday and provided payment holidays on over 82,000 business customer accounts.

As at 30 September, there were 37,000 active mortgage repayment holidays and approximately 55,000 active payment holidays on business customer accounts.

It approved £13bn through the government’s various lending initiatives.

Further, it has introduced a new target to have 3% black colleagues in senior UK roles by 2025, after previously committing to a target of at least 14% BAME representation in senior UK roles by 2025.

‘Challenging times lie ahead’

Alison Rose, chief executive officer, said: “These results demonstrate the resilience of our underlying business and the strength of our balance sheet in the face of significant continued uncertainty. Our sector-leading capital position, strong levels of liquidity and intelligent and consistent approach to risk mean we can continue to provide our customers and communities with the support they need.

“Although impairments were relatively low in the quarter and we have seen some positive trends across our customer base, the full impact of Covid-19 remains very unclear. Challenging times lie ahead, especially as the current government support schemes come to an end and as new Covid-19 related restrictions are introduced.

“We continue to deliver well against our strategy, building a bank that champions potential and has the capability to grow. By building deeper relationships with our customers at every stage of their lives, simplifying the bank further, investing in innovation and partnerships and allocating capital well, we will deliver sustainable returns to our shareholders.”