ao link
0 £0.00
This item was added to your basket
Credit Strategy homepage
LinkedIn
Twitter
Intelligence, Insight and community for responsible professionals in credit

Analysis: NatWest Group suffers impairment losses of nearly £3bn as payment holidays reach 240,000 

Natwest Group suffered a net impairment loss of £2.85bn in the first half of 2020, while it provided 240,000 customers with an initial three-month mortgage repayment holiday, its half-yearly results show.  

NatWest Group believes the full year of 2020 impairment charge is likely to be in the range of £3.5-£4.5bn, which it attributes to a combination of the developing economic outlook and the effectiveness of government support schemes in reducing the level of economic distress.

 

In the first half of 2020, total income decreased by £262m, or 10.7%, when compared to the same period last year.

 

In personal banking, impairment losses in the first half were £657m, which increased by £476m compared to the same period in 2019. Net loans to customers increased by £12.6bn compared to the first half of 2019.

 

Mortgages

The 240,000 of customers that requested a mortgage holiday represents 20% of NatWest’s loan book by volume.

 

The report showed that as of June 30, NatWest Group has £532m mortgages in arrears, which is a small increase from December 2019, where £528m mortgages were in arrears.

 

Loans

According to the report, net loans to customers increased by £12.6bn as a result of gross new mortgage lending and lower redemptions.

 

NatWest offered the option of three-month payment deferrals on personal loans, with 72,000 customers taking up the offer. This represents 7% of the loan book.

 

Cards

Some £30m of card balances are in arrears, which is almost double the figure in December 2019.

 

Impairment provisions

NatWest’s impairment provisions as of June 2020 were £6.1bn, which represents a 64% increase on December 2019, where impairment provisions were £3.7bn.

 

FCA

In 2014, the Financial Conduct Authority (FCA) investigated NatWest Group’s treatment of SME customers whose relationship was managed by NatWest Group’s Global Restructuring Group (GRG) in the period 1 January 2008 to 31 December 2013. In response to the final report and update in 2016, NatWest Group announced redress steps for SME customers in the UK and the Republic of Ireland. NatWest Group’s remaining provisions in relation to these matters at June 30 2020 were £72m.

Please login to continue reading this article.

Not a member?

Become a member

FREE registration. No credit card required

Register now
  • Stay up-to-date with industry news and appointments
  • Hear about events first
  • Read 1 free Premium article per month

Become a premium member

From as little as £3.48 per week

Become Premium
  • All the perks of a standard member plus:
  • Access to the entire Credit Strategy website
  • 12 months subscription to Credit Strategy Magazine
  • 25% discount to all conferences
  • Exclusive access to Premium Member only roundtables
  • 50% off award entry fees

GET THE LATEST INDUSTRY NEWS STRAIGHT TO YOUR INBOX

Upcoming events

Women in Credit Awards 2021

Car Finance Autumn Conference

Car Finance Awards 2021

Credit Strategy
LinkedIn page

Member of

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group