LONDON (AFP) – Britain’s NatWest bank announced yesterday it slumped into a net loss in 2020 on the fallout from the coronavirus pandemic, adding it would shut its Ulster Bank operations in the Republic of Ireland.
NatWest, which last year changed its name from Royal Bank of Scotland and remains majority owned by the United Kingdom (UK) government, reported an annual loss after tax of GBP753 million, compared with a net profit of GBP3.13 billion in 2019.
NatWest said despite “significant progress” at Ulster Bank in recent years, operations in “Ireland will not be in a position to achieve an acceptable level of sustainable returns”.
There will therefore be a phased withdrawal over the coming years, with “minimised” job losses, but Ulster Bank will continue to operate in Northern Ireland, it added.
NatWest said it agreed a non-binding memorandum of understanding with Allied Irish Banks for the sale of commercial loans worth around EUR4 billion. The move is another major break with the past for Chief Executive Alison Rose, who in late 2019 became the first female head of one of the big four UK banks – the others being Barclays, HSBC and Lloyds.
With Royal Bank of Scotland synonymous with the 2008 global financial crisis, Rose quickly decided to implement a name change.
For NatWest as a whole, “the past year presented some extraordinary challenges”, she said in yesterday’s earnings statement. “Despite reporting a loss for the year, NatWest Group delivered a resilient underlying performance in a challenging operating environment.
“The bank continued to grow in key areas such as mortgages and commercial lending and our balance sheet remains strong, with one of the highest capital ratios amongst our UK and European peers,” Rose added.
NatWest is also resuming its dividend after the pandemic caused it to pause the payment one year earlier.