Alison Rose

In the second quarter of this year, Natwest posted a loss of £137m and in Q3 last year, it reported a loss of £20m.

From June 30 to September 30 2020, the bank’s total income was £275m in Q3 2020 as market activity and levels of primary issuance eased compared with the first half of the year.

Natwest also posted operating expenses of £264m which the bank said reflected progress on cost reduction following the strategic announcement in February.

The bank has allocated a further £254m in anticipated of bad COVID-19 loans, compared to its forecast of £628m. The bank said full-year provisions for bad loans would be at the lower end of its £3.5bn to £4.5bn range.

Natwest is the latest bank to reveal higher than expected profits this quarter. Yesterday, Lloyds Banking Group beat forecats as it posted pre-tax profits of £1 billion, compared with a £676m loss in the three months to June. Last week, Barclays posted pre-tax profits of £1.1bn - more than double the £507m forecast by analysts.

Commenting on the results, Alison Rose, Natwest Markets chief executive, 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 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.”