Banking large NatWest Group has put apart one other £2.1bn in case extra individuals and corporations default on loans due to the pandemic.
That meant it reported a £770m loss for the primary half of 2020. Last 12 months it made a £2.7bn revenue.
Earlier this month, chief govt Alison Rose warned of “tough times ahead” as Covid-19’s influence emerges.
The outcomes are the primary for the reason that group modified its title from Royal Bank of Scotland Group simply 9 days in the past.
It is believed that the rebrand was meant to assist shift the lender’s picture away from its association with the monetary disaster.
The financial institution was rescued by the federal government in 2008 within the aftermath of the disaster at a value of £45bn and it’s nonetheless 62% state-owned.
“Our performance in the first half of the year has been significantly impacted by the challenges and uncertainty our economy continues to face as a result of Covid-19,” Ms Rose stated.
“However, NatWest Group has a robust capital position, underpinned by a resilient, capital generative and well diversified business.
“Through our robust steadiness sheet and prudent approach to danger, we’re properly positioned not solely to face up to Covid-19 associated impacts but additionally to supply the suitable help to those that will want it most within the robust occasions to come back.”
Ms Rose told the BBC’s Today programme that the bank was “ensuring we help the financial system after which stand alongside our clients to help them because the financial system recovers”.
She added that it was too early to say what the state of the economy would be in the coming months.
“We do not understand how rapidly the financial system will get better and we do not know but what the underlying scarring is to the financial system,” she said.
NatWest has now made provision of nearly £2.9bn against non-repayment of loans.
It said that it expected to set aside between £3.5bn and £4.5bn for the whole of 2020 to deal with the economic consequences of the pandemic.
Its actions follow those of other big High Street banks in earmarking more money to cover potential defaults.
On Thursday, Lloyds said it was increasing its provision by another £2.4bn. meaning it has now built up a total of £3.8bn for bad loans.
And earlier this week, Barclays said it had set aside £1.6bn in the second quarter of the year to cover the cost of non-repayment of loans. That took its total provisions for bad loans to £3.7bn for the first half of the year.
Donald Brown, senior investment manager at Brewin Dolphin, said: “Banks are anticipated to bear loads of the financial fallout from Covid-19 and their share costs are down considerably this 12 months – in NatWest’s case, greater than 50%.
“It is likely to be a treacherous road ahead for NatWest and many of its peers. With the UK banking season nearly complete, NatWest’s statement adds to the downbeat tone heard this week.”