(Bloomberg) -- NatWest Group Plc is reversing more of the provisions it took early in the Covid-19 pandemic as the British economy rebounds, helping it beat earnings forecasts in the second quarter and return cash to shareholders.

The U.K.’s biggest corporate lender posted an operating profit before tax of 1.6 billion pounds ($2.2 billion) in the second quarter, compared to a loss a year ago, as mortgage demand stayed high and Britons emerged from more than a year of lockdowns.

“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,” Chief Executive Officer Alison Rose said in a statement on Friday.

The Edinburgh-based lender released 605 million pounds that was set aside to cover souring loans, more than analysts expected and adding to the funds it released in April. Last year, the bank earmarked about 3.2 billion pounds for potential defaults as Covid-19 restrictions pushed millions of borrowers to take emergency debt or payment holidays.

The bank said it will pay a dividend of 3 pence per share and buy back stock worth as much as 750 million pounds, after the Bank of England removed restrictions imposed at the height of the pandemic to make sure lenders could weather deep losses. NatWest said it aims to distribute a minimum of 1 billion pounds per year from 2021 to 2023, via a combination of ordinary and special dividends.

NatWest joins rivals Barclays Plc and Lloyds Banking Group Plc this week in unwinding some of their preparations for a wave of bad loans during the pandemic. Banks have reported strengthening demand for home loans and low levels of impairments as Britons get back to work and leisure without restrictions.

The U.K. will sell more of its 12.5 billion-pound ($17 billion) stake in NatWest over the next year, potentially returning the bank to majority private ownership for the first time since the financial crisis over a decade ago.

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