Approximately 258,000 mortgage repayment holidays were provided to help homeowners struggling with the Covid crisis.
The lender made a pre-tax operating loss of £351m last year, as the effects of pandemic took its toll on the business and it revealed plans to withdraw Ulster Bank from the Republic of Ireland.
However, in the final quarter, NatWest said it returned a profit before tax of £64m.
Increased mortgage margins and income helped support the business in the last three months of 2020, as the lender carried out £8.4bn worth of gross mortgage lending between October and December.
The lender said it is aiming to deliver lending growth above market rate in the years to 2023, while also reducing costs by around four per cent each year.
In the annual results, the lender revealed it would be pulling Ulster Bank from Ireland, with Northern Ireland unaffected by the move.
Alison Rose, chief executive, said it had “become clear Ulster Bank will not be able to generate sustainable long term returns for our shareholders”.
She added: “As a result, we are to begin a phased withdrawal from the Republic of Ireland over the coming years which will be undertaken with careful consideration of the impact on customers and our colleagues.”
As part of the results, the lender reported that it had 39 per cent women in its top three leadership layers and on aggregate 10 per cent Black, Asian and Minority Ethnic colleagues in its top four leadership layers in the UK.
Rose said: “Despite reporting a loss for the year, NatWest Group delivered a resilient underlying performance in a challenging operating environment.
“The bank continued to grow in key areas such as mortgages and commercial lending and our balance sheet remains strong, with one of the highest capital ratios amongst our UK and European peers.”
She added: “We cannot be certain of the long-term impact of the pandemic. But we can be certain that our bank will continue to support those who need it most as we build back better.
“By championing potential and helping people, families and businesses to rebuild and thrive, we will succeed together.”