Q3 2020 Financials
Operating profit before tax - £355m
Compared to loss of £8m at Q3 2019
Impairment charge - £254m
We believe the full year impairment charge is likely to be at the lower end of the £3.5-4.5 billion range following the limited level of defaults across lending portfolios and associated ECL stage migration within the third quarter
Alison Rose, Chief Executive Officer, commented:
“These results demonstrate the resilience of our underlying business and the strength of our balance sheet in the face of significant continued uncertainty. Our sector-leading capital position, strong levels of liquidity and consistent approach to risk mean we can continue to provide our customers and communities with the support they need.
“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.
“We continue to deliver well against our strategy, building a bank that champions potential and has the capability to grow. By building deeper relationships with our customers at every stage of their lives, simplifying the bank further, investing in innovation and partnerships and allocating capital well, we will deliver sustainable returns to our shareholders.”
Other key metrics
CET1 ratio – 18.2%
Liquidity Coverage Ratio – 157%
Costs – £193m lower for first nine months than in 2019.
- Remain on track to achieve target cost reduction of £250m in 2020.
Growth – total loans grew £31bn to £371bn for the first nine months.
- Mortgage applications up 91% on Q2, with gross new mortgage lending up 10%.
RWAs - £173.9bn
- Down £7.6bn from Q2.
- We now expect NatWest Group RWAs to be below our previously guided range of £185-195 billion at the end of 2020.
NatWest Markets RWAs - £30.0bn.
- Ahead of 2020 target reduction to £32bn (now targeting around £30bn by end of 2020).
COVID 19 support and customer activity
- Approved £13.0bn of lending to businesses through government lending initiatives as at 30 September.
- Facilitated approximately £8.8bn of Corporate Financing Facilities issuances as at 30 September.
- Approximately 250k customers helped with initial mortgage holidays in first nine months. 85% of mortgage holidays have now ended, with just a small number in arrears.
- 95% of branches kept open through COVID.
- Increased digital adoption, with 9.3m active digital users. Added almost a quarter of a million newly active mobile users during Q3, taking the total to 7.6m.
- More than 50,000 colleagues enabled to work from home, with 31,000 tech bundles delivered to homes in first nine months.
For a full picture of the numbers you can go to our Results Centre.
Conference call replays
Replays can be accessed two hours post event. Replay facilities will be available until 15 November 2020. To access a replay dial-in from the following telephone numbers and use the appropriate access code from the list below:
International dial: +44 (0) 333 300 9785
UK free call dial: 0808 238 0667
Media Audio conference ID: 5365566
Q3 2020 Media call transcript (PDF 254KB)