The bank released more than £700 million that had been set aside during the pandemic.
NatWest smashed expectations in the first half of the year as it withdrew cash that had been set aside for a rainy day and hiked shareholder payouts.
The bank said that operating profit before tax reached more than £2.5 billion in the six months, a swing from a £707 million loss in the same period last year.
Analysts had expected NatWest to show profits of around £1.8 billion in the half.
Their estimates were close, apart from one vital component.
Along with Lloyds and Barclays, NatWest set aside billions of pounds during the early days of Covid-19, in case it was needed during the ensuing economic chaos.
But the economy today looks better than it did then, allowing all three banks to dip back into these so-called impairment charges from last year.
NatWest decided to release £705 million from its impairment pot, most of which – £605 million – came in the second quarter of the year.
Chief executive Alison Rose disse: “These results have been driven by good operating performances across the group, underpinned by a robust loan book and a strong capital position.
“Defaults remain low and, given the improved outlook, we have released a further £0.6 billion of impairment provisions in the quarter.
“While we see the potential for a more rapid recovery, we will continue to take an appropriate and conservative approach as the government schemes wind down and the economy reopens.”
The business said it will pay an interim dividend of 3p per share, returning £347 million to shareholders that way.
O Governo which took a stake in the group during the 2008 financial crisis, will receive £190 million of this.
NatWest will also buy back shares worth up to £750 million from its investors.