NatWest sets aside £3.2bn to cover bad loans

NatWest sets aside £3.2bn to cover bad loans

NatWest Group sank into a loss last year after setting aside billions of pounds to cover loans that could turn sour amid the pandemic.

The bank – formerly the Royal Bank of Scotland and still 62% taxpayer-owned – posted a pre-tax loss of £351m and set aside £3.2bn for bad loans.

However, the bank will resume making dividend payments to shareholders.

Separately, it announced that it would close down its Ulster Bank business in the Republic of Ireland.

Ulster Bank is by some measures the third largest bank in the Republic of Ireland but has struggled to be profitable.

Despite setting aside billions for potentially bad loans, NatWest said actual losses could be lower than the amount it has accounted for.

But chief executive Alison Rose sounded a warning that she could not be certain over the “long-term impact of the pandemic”.

On Thursday, rival lender Barclays reported a 30% fall in pre-tax profits to £3.1bn for 2020 after it made provisions of £4.8bn for bad loans.

Profits from its investment bank saved it from the loss NatWest reported.

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