NatWest Surprises With Swing to 3Q Operating Pretax Profit Despite Impairments
By Sabela Ojea
NatWest Group PLC on Friday reported an unexpected swing to
operating pretax profit for the third quarter of 2020 despite
booking a considerable amount of impairments, and said that its
retail banking customer activity levels improved significantly
compared with the second quarter of the year.
The U.K. bank posted an operating pretax profit of 355 million
pounds ($459 million) after booking GBP254 million in impairment
losses. This compares with an operating pretax loss of GBP8 million
for the same period a year earlier and a loss of GBP1.29 billion in
the second quarter of the year.
NatWest was expected to report an operating pretax loss of GBP75
million for the third quarter of the year, and impairment losses of
GBP628 million, according to the bank's own compilation of
The FTSE-100 listed bank's total income declined to GBP2.42
billion from GBP2.90 billion in the year-earlier period. The lender
said total income decreased due to lower fee income on overdrafts,
lower deposit returns, mortgage margin dilution and lower
international spend-related fee income, which was partially offset
by strong balance growth in mortgages and customer deposits.
Nat West's common equity Tier 1 capital ratio--a measure of a
bank's financial strength--stood at 18.2%, up from 17.2% as at June
30. It was anticipated at 16.7%, according to the lender's
compilation of forecasts.
The bank added that it maintains its outlook guidance for the
whole year, but noted that impairment charges are now likely to be
at the lower end of the GBP3.5 billion-GBP4.5 billion range.
Write to Sabela Ojea at firstname.lastname@example.org; @sabelaojeaguix
(END) Dow Jones Newswires
October 30, 2020 03:41 ET (07:41 GMT)
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