- NatWest, the bank formally known as Royal Bank of Scotland, swung to a third-quarter profit after its impairment losses fell sharply from the second quarter and it incurred far less costs due to misconduct.

NatWest, like rivals HSBC, Barclays and Lloyds before it, also forecast annual credit losses at the lower end of its previous guidance range.

Net profit for the three months through September amounted to £61 million, compared to losses of £315 million year-on-year, which had included 'litigation and conduct' costs of £750 million.

Impairment losses amounted to £254 million, down from £2.06 billion in the second quarter, but still above the year-on-year figure of £213 million.

Revenue, including interest income and non-interest income, fell to £2.42 billion, down from £2.90 billion.

The bank's net interest margin, the difference between what it makes on loans and what it pays out in deposits, shrank to 1.65%, down from 1.97% year-on-year and down from 1.67% in the second quarter.

Chief executive Alison Rose said results demonstrated 'the resilience of our underlying business and the strength of our balance sheet in the face of significant continued uncertainty'.

However, she said that although impairments were relatively low in the quarter and some customer trends were positive, the full impact of Covid-19 remained 'very unclear'.

'Challenging times lie ahead, especially as the current government support schemes come to an end and as new Covid-19 related restrictions are introduced,' Rose said.

On its outlook, NatWest said it expected its full-year impairment was likely to be at the lower end of its previous £3.5 billion-to-£4.5 billion guidance range.

Risk-weighted assets were expected below a previously guidance range of £185 billion-to-£195 billion due to low inflation, with previously expected uplifts delayed to 2021.

Story provided by