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NatWest posts pre-tax loss of £351m as bank announces withdrawal from Ireland

Natwest dividend at 3p per share

Natwest (LON:NWG), formerly known as the Royal Bank of Scotland, confirmed a £351m loss on Friday. 

The bank also announced it would be exiting from the Republic of Ireland in a phased withdrawal. 

Natwest will discontinue its Irish arm, Ulster Bank after a review showed the bank was not making sustainable returns, said chief executive Alison Rose. 

“Following an extensive review and despite the progress that has been made, it has become clear Ulster Bank will not be able to generate sustainable long-term returns for our shareholders,” Rose said.

“As a result, we are to begin a phased withdrawal from the Republic of Ireland over the coming years which will be undertaken with careful consideration of the impact on customers and our colleagues.”

Natwest’s loss represents a huge swing from a profit of £4.2bn a year ago. The change is a result of £3.2bn of loans being written off down to fears they may not be repaid. 

Income across the bank’s commercial and retail businesses fell by 10% during 2020, while a cost reduction of £277m was achieved, surpassing the bank’s annual target. 

Natwest will pay out a £364m dividend for the year at 3p per share, however £225m will go to the UK government, the majority owner of the bank. 

Natwest shares fell by 1.28% on Friday morning following the company’s results, down to 169.1p per share.

Alison Rose commented on the bank’s performance during a challenging year: 

“The past year presented some extraordinary challenges for our customers, colleagues and communities. We provided exceptional levels of support to those who needed it, including the approval of over £14 billion of lending under UK Government schemes, demonstrating that we have truly put Our Purpose at the heart of this business.

Being purpose-led isn’t just the right thing to do, it has a powerful commercial imperative and is fundamental to building sustainable value in our business,” Rose said.

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