NatWest reveals plans to withdraw from the Republic of Ireland

Library photo of a branch of NatWest.Library photo of a branch of NatWest.
Library photo of a branch of NatWest.
NatWest Group, formerly the Royal Bank of Scotland, has said it will reinstate dividends by paying £364 million to shareholders, of which £225 million will go to the Treasury, its majority owner.

The bank said that it had made a pre-tax operating loss of £351 million in 2020 after taking an impairment charge of £3.2 billion for loans it expects might default in future, to a large extent because of Covid-19.

The impairment is below the range of £3.5 billion to £4.5 billion that the bank had previously guided.

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The new dividend is announced almost a year since the Prudential Regulation Authority (PRA) told major banks not to pay out dividends in order to preserve cash for the upcoming pandemic. Friday’s announcement means that NatWest is paying out the maximum dividend it is allowed under more recent PRA guidance.

NatWest also said that it planned to withdraw from the Republic of Ireland, where it owns Ulster Bank. It said that a strategic review had concluded that Ulster Bank would not achieve an acceptable level of sustainable returns.

It means that the bank will start a phased withdrawal from the Republic of Ireland, but its business in Northern Ireland will be unaffected. NatWest said it would try to ensure that job losses are minimised.

NatWest chief executive Alison Rose said: “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.

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“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.”