National Westminster Earnings Dropped 76%
LONDON - Hurt by losses in the United States and a doubling in provisions for soured lending, National Westminster Bank on Tuesday reported that its pretax earnings dropped 76%, to $171 million, in the first half of the year.
Britain's second-largest bank said the profit slide was partly due to the previously reported pre-tax loss of $275.6 million by its U.S. unit, National Westminster Bancorp, New York.
The British parent injected $450 million of equity capital into the U.S. unit during the half and made several management changes, including appointing John Tugwell, a senior executive responsible for international business, as chairman and chief executive.
Apart from the United States, NatWest's provisions for bad and doubtful debts jumped 112%, to $1.53 billion, amid rising corporate failures in the recession-beset British economy.
The economic downturn was among the sharpest since 1945, said NatWest's chairman, Lord Alexander.
The bank's operating profit - before souring loan provisions - rose 14%, to $1.67 billion, much of it from what Lord Alexander called "bedrock" operations in British financial services.
NatWest follows other major London money-center banks that in the last week have also reported weaker first-half performance. Barclays PLC earnings slid 37%, to $642 million; those of Lloyds Bank PLC fell by 18.8%, to $562 million; and Midland Bank PLC posted a loss of $120 million, versus a $61 million profit in first-half 1990. [Tabular Data Omitted]