UK bank Natwest cuts lending to oil and gas sector

Signage for NatWest bank in London February 14, 2012. REUTERS/Luke MacGregor

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  • Bank cut lending by 21% to stg 3.25 billion in 2021
  • Withholds 500 million stg from companies with weak climate plans
  • Plans to limit lending to UK-based businesses

LONDON, Feb 18 (Reuters) – Britain’s Natwest bank (NWG.L) has cut lending to oil and gas clients by 21% in 2021 and aims to limit them further as part of efforts to decarbonise its portfolio of ready and achieve net-zero emissions, he said on Friday.

Financial firms around the world are increasingly committed to net zero as part of efforts to contain global warming, though most have yet to put firm plans in place, especially short term. Read more

The figures were announced in Natwest’s first update since it warned in 2020 that it planned to cut funding to major oil and gas companies if they lacked a credible plan to go to net zero. .

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Natwest said its lending to oil and gas companies fell by a fifth to 3.25 billion pounds ($4.43 billion) last year, and total lending to the sector now stood at 0.7 % of its total loan portfolio.

“Finance is a key enabler in the transition to Net Zero and we are taking action to ensure we help end the most harmful activity while championing climate solutions and accelerating the speed of transition to the zero economy. carbon,” Chief Executive Alison Rose said. said in a statement.

The bank said it was further restricting lending and that from January 1 it would only lend to upstream oil and gas companies where the majority of their funded assets are based in the UK and where the company says emissions by the end of 2023.

A review of major oil and gas companies and those with more than 15% of their business related to thermal coal or lignite, including mining, power generation and trading, which together accounted for 1.4 billion pounds of funding, revealed that many did not have a good enough climate transition plan.

As a result, the bank said it would stop lending and underwriting to businesses accounting for £967 million of the total.

The climate update was released alongside the lender’s annual results, which showed an increase in pre-tax profit to £4bn. Read more

($1 = 0.7336 pounds)

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Reporting by Simon Jessop Editing by Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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