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NatWest’s mortgage payment holidays drop 200,000  

NatWest Group’s Q3 results have revealed today the bank provided a peak of 250,000 mortgage payment holidays, but these have since dropped to just 37,000 which are still active.

As at 30 September 2020, there was also around 55,000 active payment holidays on business customer accounts, (about eight percent of the book), after 72,000 were approved.

 

The results also showed that retail banking had about 40,000 of personal loan customers still on active repayment holidays.

 

Earlier this year, NatWest group saw the value of all types of loans subject to payment holidays reach a peak of £33.6bn, which equated to 22% of the loan book. As of Q3 2020, the value of lending on payment holidays had dropped to £6.2bn, around four percent of the loan book.

 

Amid financials which show the bank posted an operating loss of £415m for the nine months to September, they also reveal the huge extent to which customers are resuming payments after deferrals. Some 85% of mortgage payment holidays have matured, with almost all customers having returned to paying as normal.

 

Impairments and provisions

The results revealed that provisions for estimated credit losses, in retail banking, totalled £1.9bn.

 

NatWest explained that the full year impairment charge is likely to be at the lower end of the £3.5bn-£4.5bn range following the limited level of defaults across lending portfolios.

 

Estimated credit losses (ECL) under IFRS9 stages

Stage 1

Stage 2

Stage 3

Total

Personal banking

£177m

£1bn

£1.3bn

£2.5bn

Mortgages

£32m

£286m

£651m

£969m

Credit cards

£50m

£245m

£85m

£380m

 

Alison Rose, chief executive officer, said: "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."

 

Government-backed lending schemes

The results also show the extent to which NatWest has been issuing emergency loans to SMEs and larger firms. Its total approved commercial banking lending under government-backed schemes was £12.8bn and NatWest Group’s share of this total is around 22%.

 

The results revealed NatWest has approved a total of £7.9bn bounce back loans, and £3.7bn of coronavirus business interruption loans. It has also approved £1.2bn of coronavirus large business interruption loans.

 

Work from home policy

NatWest said that it continued to enable more than 50,000 colleagues to work from home, after delivering office furniture and computer equipment, including 31,000 tech bundles to homes.

 

The report also showed that the bank enhanced its free mental health support for staff, through a new partnership with Silvercloud, providing support to any colleague who needed it and provided all leaders access to extended mental health awareness support.

 

Vulnerability

In recent months NatWest Social and Community Capital launched a £1m Coronavirus Response Fund, offering grants to organisations across the UK that employ people from vulnerable or disadvantaged groups. The trading update also explained the launch of a review with SafeLives, which looked into supporting survivors of economic abuse and acquired coercive debt.

 

Customer engagement

According to the results, NatWest saw six million interactions with its artificial intelligence chat bot, Cora, in Q3. Some 9.3 million customers actively engaged digitally, which is an increase of 300,000 on Q3 2019.

 

NatWest also launched ’Banking My Way’ service, which enables customers who need additional support to request bespoke assistance, with 38,500 registrations since its launch.

 

Litigation and costs

The result revealed litigation and conduct costs of £912m in retail banking up until Q3.

 

NatWest also saw strategic costs of £223m in the quarter, which included £90m redundancy costs, and a £34m charge related to technology spending.

 

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