NatWest Bank has returned to profit, as bad loan fears ebb, and immediately promised payouts to shareholders.
The state-backed bank reported pre-tax profit of £2.5bn (£1.6bn in Q2) for the six months to June, against a loss of £770m at H1 2020.
The bank has declared an interim dividend of 3p per share and a share buyback of up to £750m.
Attributable profit came in at £1.8bn (£1.2bn in Q2) against a loss of £705m in the first half last year. The state-backed bank
There is a release of an impairment charge of £707m (£605m in Q2).
Chief executive, Alison Rose, said: “These results have been driven by good operating performances across the Group, underpinned by a robust loan book and a strong capital position.
“Defaults remain low and, given the improved outlook, we have released a further £0.6 billion of impairment provisions in the quarter. While we see the potential for a more rapid recovery, we will continue to take an appropriate and conservative approach as the government schemes wind down and the economy reopens.
“We continue to make progress against our strategic targets”
“As a result of our strong and resilient performance, coupled with our capital strength and cautiously optimistic outlook, we are announcing an interim dividend of 3p per share and share buyback of up to £750m.
“We are also increasing our minimum annual distribution to shareholders to £1bn for the next three years. Taken together, this means our total distributions for 2021 will be a minimum of £2.9bn.
“We continue to make progress against our strategic targets and to accelerate our digital transformation as we build a bank that is relevant to our customers in every region of the UK and that supports them at every stage of their lives.
No plans for compulsory vaccination for employees
“As the UK’s leading business bank, we are determined to remove barriers to entry and help the economy build back better.
“Against the background of an ongoing pandemic, our commitment to helping people, families and businesses to rebuild and thrive has never been more important. Because if they thrive, so will we.”
In a conference call, Ms Rose said there were no plans for compulsory vaccination against Covid-19 for employees returning to offices.