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(Alliance News) - NatWest Group PLC on Friday committed itself to generous shareholder returns after posting a swing to first-half profit, helped by an impairment release.
The Edinburgh-based bank reported total income of GBP5.32 billion in the six months that ended June 30, down 8.9% from GBP5.84 billion a year earlier.
FTSE 100-listed Natwest swung to a pretax profit of GBP2.51 billion from a GBP770 million loss a year prior.
Profit was boosted by a net impairment release of GBP707 million, contrasting with a hit of GBP2.86 billion taken a year earlier.
"While we see the potential for a more rapid recovery, we will continue to take an appropriate and conservative approach as the government schemes wind down and the economy reopens," Chief Executive Alison Rose commented.
The bank declared a 3 pence per share payout and also unveiled plans to buyback GBP750 million worth of shares in the second half of 2021.
Natwest said it plans to distribute a minimum of GBP1 billion each year from 2021 to 2023 through a mix of ordinary and social dividends.
This means total shareholder distributions for 2021 will be a minimum of GBP2.9 billion, the company said.
While the Covid-19 vaccine rollout has improved the economic outlook, Natwest said, its forecast remains uncertain.
The bank largely retained annual guidance, though it now expects a net impairment release for all of 2021 and tipped risk-weighted assets to come in below its previous GBP185 billion and GBP195 billion range.
The company said its CET1 ratio is 18.2%, consistent with the first quarter.
Despite its largesse toward shareholders, NatWest shares were down 1.0% to 202.80p in London on Friday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
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