NatWest Results – £351 Million Loss, Withdrawing From Ireland

NatWest announces huge loss despite cost reduction

February 19, 2021
NatWest Results - £351 Million Loss, Withdrawing From Ireland
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NatWest has today announced its annual results with a £351 million pre-tax loss. As part of an ongoing strategy review, the bank has also confirmed reports that it will be withdrawing from the Republic of Ireland.

The bank, which traded in Ireland under the name Ulster Bank and was the third-largest in the country, will be wound down over the coming months after the review projected it would not be able to achieve sustainable results. Allied Irish Banks will purchase €4 billion of loans, while NatWest has stated that it will ensure that job losses are kept to a minimum.

The move does not impact NatWest/Ulster Bank in Northern Ireland which will continue to operate as normal.

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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.

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.

Alison Rose, Chief Executive

NatWest follow in the footsteps of other foreign lenders to have withdrawn from the Irish market in recent years, with Rabobank, Danske Bank and Lloyds Banking Group all having left the country. The two larger banks in Ireland – Allied Irish Banks and Bank of Ireland – both have majority stakes owned by the Irish government.

Further Changes From NatWest

The move is the second major restructuring decision taken since Chief Executive Alison Rose took charge in 2019. Last year the bank announced that it was drastically reducing the size of its investment banking unit.

The bank remains in talks to tell off part of its Adam & Co. private banking arm, with the remaining business folded into the larger Coutts function, according to reports.

Rose continues to make larger changes as she bids to cut costs and secure the future of the bank.

Year-On-Year Decrease

As part of the annual results, NatWest’s figures show a decrease in both retail and commercial business of 10% compared to 2019. The negative impact that was anticipated of lower yield curve, less consumer spending and reduced business activity was partially mitigated by strong balance growth.

One area of success was in cost reduction – the bank had set a target of £250 million cuts, and surpassed that, reporting a final reduction of £277 million.

The bank has announced its intention to pay a final dividend, which will total £364 million. Of that, £225 million will go to the Treasury as the majority shareholder. This comes a year after banks were advised not to pay out a dividend by the Prudential Regulation Authority, in anticipation of the upcoming pandemic.

This payout is the maximum permitted under the more recent guidance from PRA.

Ian Lewis
Ian Lewis
Ian is an experienced writer with 15 years’ experience working in journalism and marketing. He’s worked in-house in financial institutions as well as writing freelance pieces for a variety of banking and financial trading websites.

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Mentioned Banks

About Adam & Company Founded in 1983, Adam and Company is a division of the Royal Bank of Scotland (RBS), catering for private banking customers with services including investment...
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About AIB Allied Irish Bank, or AIB Group, is an Irish commercial bank headquartered in Dublin. Founded in 1966, it was essentially nationalised in 2010 after the Irish government...
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About Coutts Coutts and Company is a private bank and wealth management firm, based in the UK. Founded in 1692, it is the seventh oldest bank in the world. Coutts has been owned by...
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About Lloyds Bank Lloyds Bank is a British retail and commercial bank. One of the ‘Big Four’ clearing banks, it was founded in Birmingham in 1765. It is the largest retail bank in...
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NatWest, or National Westminster, is a retail and commercial bank based in the United Kingdom. It is one of the ‘Big Four’ UK clearing banks and has more than 7.5million personal banking...
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About Danske Bank Danske Bank, formerly known as Northern Bank, is a Northern Irish commercial bank. As Northern Bank, it was one of the oldest banks in Northern Ireland and was one...
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About Ulster Bank Ulster Bank is one of the ‘Big Four’ Irish banks and is registered in both Northern Ireland (as Ulster Bank Limited) and the Republic of Ireland (as Ulster Bank...
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About Bank of Ireland The Bank of Ireland is an Irish commercial bank. It is one of the ‘Big Four’ of Irish banks and was established by Royal Charter in 1783. The Bank of Ireland...
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