NatWest to return £3bn to shareholders

NatWest Group is increasing its minimum annual distribution to shareholders to £1 billion over the next three years.

NatWest, which returned to profit after a £1.3 billion loss last year, said that distributions would come in the form of ordinary and special dividends.

The state-backed bank also plans to commence a share buy-back programme of up to £750 million in the second half of the year.

The move comes as NatWest reports pre-tax profits of £2.5 billion for first half of the year, compared with an operating loss before tax of £770 million during the same period of 2020.

Across the three-months to June, NatWest accumulated £1.6 billion in profits before tax.

This year the bank managed reverse £600 million worth of impairments which had been used to cover potential loan defaults during the early stages of the pandemic.

"These results have been driven by good operating performances across the Group, underpinned by a robust loan book and a strong capital position,” said Alison Rose, chief executive, NatWest Group. “Defaults remain low and, given the improved outlook, we have released a further £0.6 billion of impairment provisions in the quarter.”

The chief exec added that while the bank sees potential for a more rapid recovery, it will continue to take an “appropriate and conservative” approach as government schemes wind down and the economy reopens.

” As a result of our strong and resilient performance, coupled with our capital strength and cautiously optimistic outlook, we are announcing an interim dividend of 3p per share and share buy-back of up to £750 million,” said Rose. “We are also increasing our minimum annual distribution to shareholders to £1 billion for the next three years.

"Taken together, this means our total distributions for 2021 will be a minimum of £2.9 billion.”

She said that the bank continues to make progress against its strategic targets and is currently accelerating its digital transformation.

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