NatWest said it was pulling out of the Republic of Ireland as the bank reported a smaller than expected annual loss and restored its dividend.
The FTSE 100 lender swung to a £351m operating pretax loss for the year to the end of December from a £4.2bn profit a year earlier as income fell and it set aside more for bad debts during the pandemic. Analysts had on average expected a £418m annual loss.
NatWest, formerly known as Royal Bank of Scotland, said it would pay a final dividend of 3p a share, restoring the payout after the Bank of England blocked banks from paying dividends early in the Covid-19 crisis.
Income dropped to £10.8bn from £14.3bn and credit impairments jumped to £3.2bn from £696m. Excluding notable items income fell 8% to £11.2bn.
In the fourth quarter, NatWest’s profit fell to £64m from £1.5bn, beating a consensus forecast for a £1m loss.
NatWest said it agreed to sell 4bn of commercial loans to Allied Irish Banks as a first step towards withdrawing from the Irish market. It is also in talks with Permanent TSB about selling retail and small business lending operations to the Irish lender.
NatWest, which trades as Ulster Bank in Ireland, said its business in Northern Ireland would not be affected.
Alison Rose, chief executive, said: “Despite reporting a loss for the year, NatWest delivered a resilient underlying performance in a challenging operating environment. We have today announced our intention to pay a final dividend whilst reaffirming our commitment to regular capital returns for shareholders in the future.”
Ulster Bank is Ireland’s third-biggest lender with 15% of the country’s mortgage market and almost 20% of small business lending. NatWest has owned the bank since before the 1922 division of Ireland into the Republic and Northern Ireland, also known as Ulster.
