NatWest wants to bolster its lending firepower. To do so it plans to cut deals with investors to offload some of its loan risk, to make its capital go...
LONDON - NatWest wants to bolster its lending firepower. To do so it plans to cut deals with investors to offload some of its loan risk, to make its capital go further and preserve dividends, executives told Reuters.
"Our Commercial & Institutional business consumes the largest amount of capital across our three customer businesses," Begbie told Reuters. NatWest, formerly known as Royal Bank of Scotland, was forced to embark on a massive restructuring in the years following its 46 billion pound bailout in 2008.A wave of asset sales left the bank with an abundance of excess capital, which management has steadily reinvested or returned to investors, including the government.
Currently one of Britain's biggest lenders to small and medium-sized businesses, NatWest's future loan origination activity will not depend on its SRT market activity but it will be "beneficial and supportive," Begbie added. "But what you hear much less about is how Basel 3.1 might also introduce challenges to the economics of SRTs," he added, with banks likely needing to pay more to investors to reap the same capital relief.
Capital Management Robert Begbie Investors Srts Loan Origination
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