World News – UK – NatWest Profit Before Tax Exceeds Forecast

The results of the banking group were helped by a reduction in the amount set aside to deal with defaults expected from the pandemic

The figure was well above the loss of £ 75million expected by analysts and was helped by the bank to reduce the amount set aside to deal with defaults expected from the coronavirus pandemic

Depreciation charges had been forecast at £ 628million but stood at £ 254million meaning the total amount will be on the lower end of the bank’s forecast of 3 pound sterling5 to 4 £ 5 billion

Chief Executive Officer Alison Rose said: « These results demonstrate the resilience of our underlying business and the strength of our balance sheet in the face of significant persistent uncertainty

« Our leading capital position, strong liquidity levels and consistent approach to risk allow us to continue to provide our clients and communities with the support they need »

Ms Rose added: « Although write-downs were relatively low during the quarter and we observed positive trends in our customer base, the total impact of COVID-19 remains very uncertain.

« Tough times lie ahead, especially as current government support programs end and new COVID-19 restrictions are introduced »

Richard Hunter, Head of Markets at Interactive Investor, called the results a « surprise » and « proof that this progress is possible even in a difficult environment »

« However, it is also possible that more recent economic concerns emanating from the latest COVID-19 outbreaks, not to mention the outcome of the UK / EU deliberations, could lead to a more trying last quarter

« With interest rates at the bottom, the pressure on margins will remain, as evidenced by the latest figure of 165%, instead of 197% a year ago

« The possible deterioration of the UK economy over the coming months, combined with the bank’s strong exposure to the SME sector, may well overshadow the progress made »

© 2020 Sky France

NatWest, Finance, NatWest Group