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UK government in line for £1bn payment of NatWest Group stake |  NatWest Group

The UK government is in line for a £1billion payout of its nearly 50% stake in NatWest Group, despite a drop in the bank’s second quarter profits and ‘uncertainty’ over the Kingdom’s economic outlook -United.

NatWest revealed on Friday it was set to issue dividends worth 20.3 pa, after reporting ‘strong growth’ in loans and deposits across the business, in part thanks to rising interest rates, which meant he could charge borrowers more for loans and mortgages.

Almost half of the dividends – around £1billion – will go to the Treasury, which still owns 48% of the bank’s shares after its £46billion bailout at the height of the 2008 banking crisis.

The payout to shareholders comes despite a drop in profits between April and June, which fell 5% to £1.4bn from £1.5bn a year earlier. However, it was better than the £940million analysts had expected, according to consensus estimates.

The figures exclude the financial impact of Ulster Bank in Ireland, which is selling off its loan portfolios as NatWest winds down operations.

The bank has also released £18million which was initially set aside to deal with possible defaults. This is despite “uncertainty” over economic forecasts, including the path of inflation which has already hit a 40-year high of 9.4% in June.

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Chief executive Alison Rose said the lender was watching for signs of financial stress and working to support struggling customers as prices continued to climb.

“We know that continued increases in the cost of living are impacting people, families and businesses across the UK and we have put in place a series of targeted measures to support those who are likely to have it the most. need. Our high levels of profitability and capital generation mean we are well placed to provide this support.

“By building closer relationships with our customers at every stage of their lives, we will ensure sustainable growth and help them thrive in a challenging environment,” she said.

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