Lending woes drag Natwest into the red

 Natwest Group slumped to a £770m pre-tax loss in the first half of the year as the Covid-19 crisis hit the bank’s loan book, writes Michael O’dwyer.

The bank, which remains 62pc state-owned after a £46bn bailout during the 2008 financial crisis, factored in £2.9bn from customers failing to repay loans as the economic outlook darkened.

The cost of impairments in the first half was almost nine times higher than in the first six months of 2019, and Natwest predicted that the charge for the whole of 2020 was likely to be between £3.5bn and £4.5bn.

The £770m pre-tax operating loss is a sharp reversal of the pre-tax profit of almost £2.7bn in the same period last year.