- NatWest posted a significantly lower profit in the last quarter as less earnings and high impairment impacted business.
- The UK bank's total revenue declined 34% year over year to GBP 2.7 billion (USD 3.5 billion) and its impairment charges rose to over GBP 2 billion, meaning that it came from a pre-tax profit of 1 £ 7 billion ($ 2.2 billion) increased to £ 2.7 billion ($ 2.2 billion), a loss of £ 1.3 billion ($ 1.7 billion).
- "Our performance in the first half of the year was significantly impacted by the challenges and uncertainties that our economy continues to face as a result of Covid-19," said CEO Alison Rose in the Publication of results.
- NatWest's net interest margin decreased and the loan impairment rate increased, but also supported finances and increased both liquidity coverage and Common Equity Tier One (CET1).
- You can find more stories on the Business Insider homepage.
NatWest suffered a sharp drop in earnings in the second quarter as pandemic locks and travel restrictions weighed on business and consumer spending. The British bank – formerly known as RBS – also supported its finances in case the crisis worsens.
"Our performance in the first half of the year was significantly impacted by the challenges and uncertainties that our economy continues to face as a result of Covid-19," said CEO Alison Rose in the Publication of results.
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"However, the NatWest Group has a robust capital position supported by a robust, capital generating and well diversified business."
NatWest shares rose 1% on Friday, outperforming the FTSE 100 benchmark index by 0.7%.
Here are the key numbers:
Revenue: £ 2.68 billion versus £ 2.66 billion estimate
Earnings per share: -8.2p versus the -2.6p estimate
NatWest's net interest income declined 3% and noninterest income fell 63% yoy in the last quarter, resulting in a 34% decrease in total income to GBP 2.7 billion (USD 3.5 billion) .
The bank's impairment losses increased almost nine-fold over the previous year to GBP 2 billion, meaning the bank went from a pre-tax profit of GBP 1.7 billion in the second quarter of 2019 to a loss of GBP 1.3 billion in the last Quarter rose.
NatWest's gains underscored the challenges of lending during a pandemic. The net interest margin decreased from 2.02% to 1.67%, while the loan impairment rate rose from 0.3% to 2.29%.
The bank has also worked to reduce the risk of lack of cash. Liquidity coverage increased from 152% to 166% in the first half of the year and CET1 (Common Equity Tier One) – a key regulatory measure for a bank's financial strength – from 16.2% to 17.2%. .
(tagsToTranslate) Finance (t) Markets (t) Banking (t) NatWest (t) RBS (t) Revenue (t) Coronavirus (t) Pandemic