NatWest last year posted its biggest annual profit since the 2007 financial crisis, supported by high interest rates, as interim boss Paul Thwaites confirmed he would become chief executive permanently before selling government shares. raised.
The British financial institution, which remains 35% state-owned, announced a 20% rise in pre-tax profits to £6.2bn in the year to December. This marked the company's highest annual profit since it made £10bn in 2007, the year before overages led to a public bailout, which it still hasn't fully cleared up 16 years later. .
Following another year of interest rate hikes by the Bank of England, the big profits in 2023 were due to banks earning more from loans and mortgages compared to what they paid out to depositors. These revenues, known as net interest income, rose 12% to £11bn.
Despite the sharp rise in profits, the bonus pool for bankers fell by 3% to £356m. NatWest said this reflected the impact on shareholders as the bank missed its previous profit guidance. Shareholders will receive a £1 billion dividend (the final dividend is equivalent to 11.5 years of shares) and the chance to participate in a £300 million share buyback program.
The results will set a high standard for Mr Thwaites, with NatWest announcing on Friday that he will take up the role permanently as chief executive with immediate effect, joining the bank's incoming chairman Richard Haythornwaite. It has been confirmed that the company will manage the
Mr Thwaites, who previously led NatWest's business banking division, was appointed interim CEO after his predecessor Alison Rose was forced to resign over a dispute with Nigel Farage over the abolition of the bank.
Mr Thwaite's appointment comes after the state regulator, which administers the taxpayer's stake, said the market needed reassurance about NatWest's leadership before proceeding with a sale. It would help pave the way for government plans to sell to the public.
The debankment debate began after NatWest-owned private bank for the ultra-high net worth, Coutts, planned to close Mr Farage's bank account, suggesting the bank was concerned about his political views. The incident snowballed after obtaining internal documents. The scandal escalated further when it emerged that Rose had been discussing the Farage affair with a BBC journalist.
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Ms Rose was forced to forfeit her £7.6 million salary from NatWest, but independent lawyers hired by the bank concluded she made an “honest mistake” when speaking to the BBC. It concluded that concerns about Mr Farage's political views were not a driving force in the decision. to close his account.
Mr Thwaites said in a statement: Achieve profitable growth while effectively managing costs and capital to become more efficient, productive, and manageable. Together, these actions will drive long-term, sustainable value for our customers, shareholders and the wider UK economy. ”
