The £770m pre-tax operating loss is a sharp reversal of the pre-tax profit of nearly £2.7bn in the same period past year.
Operating losses for the first half before impairment charges were £770 million, as the bank's net interest margin - the gap between the interest rate it collects on loans and the rate it pays out on deposits - shrank from just over 2% a year ago to 1.67% at the end of June.
This is in spite of the fact that the bank raised its provisions for bad loans from £800 million in the first quarter to £2.86 billion for the first half and predicted that the full year charge could be as high as £4.5 billion.
The newly-rebranded bank - which ditched its Royal Bank of Scotland group name earlier this month - follows rivals Barclays and Lloyds this week in setting aside hefty provisions for potential loan losses.
"What the final bill is will depend on 'the effectiveness of government support schemes in delaying and reducing the level of economic distress experienced by our personal and commercial customers, ' the FTSE 100-listed lender said in its results statement".
Income at the bank, still 62%-owned by the taxpayer after its bailout in the 2008 financial crisis, fell 3.75% to £3.8bn in the first half. NatWest made a profit of £2bn before impairment charges.
Ulster Bank has reported an operating loss of €276m for the first half of the year, largely driven by impairment charges based on an anticipated spike in bad loans.
Alison Rose, chief executive, said performance had been significantly impacted by coronavirus.
"The group is well positioned to cope if actual losses prove to be worse than anticipated", said Gary Greenwood, analyst at Shore Capital.
"The question therefore remains as to where the banks can reasonably get to from here, and whether prospects will continue to be dominated by factors beyond their control".
Hargreaves Lansdown equity analyst Nicholas Hyett said NatWest's lending to businesses had increased dramatically year-on-year as companies sourced emergency funding during the lockdown. We're not sure NatWest has an answer to that, especially since it's shrinking investment bank means interest income is getting ever more important for the business.
An average of analysts' predictions, compiled by the bank, had forecast that NatWest would reveal a £943m hit.
David Madden at CMC markets pointed out that in the six month period Natwest's operating expenses were £814mln, up over 100% from previous year.