NatWest’s £6.2bn profits boosted by interest rates as new boss revealed

NatWest reported a jump in profits and confirmed its new boss to replace former chief executive Alison Rose who resigned following the Nigel Farage de-banking controversy as it announced its highest profits since the financial crisis.

The bank, more than a third of which is owned by taxpayers, said Paul Thwaite would be paid a £1.15m salary and an annual performance-related bonus of up to 100 per cent of salary in cash and shares, as well as other benefits.

The bank said he was an “outstanding candidate and the right person to shape the future of NatWest”.

The banking group’s pre-tax profits rose 20 per cent to £6.2 billion over 2023, the highest profit since just before the global financial crisis in 2007 and higher than experts expected. The bank benefited from rising interest rates pushing up the cost of borrowing.

The profits will encourage the Government who have announced they plan to sell the remaining 34 per cent stake it has held since it was forced to step in and bail the bank out during the crisis. Ministers are keen to offer many of the shares to ordinary consumers by reviving a 1980’s ‘Tell Sid’ style sale.

However, the bank’s share price fell despite announcing it would return £300m back to shareholders through a share buyback. The shares fell after it warned it expects its revenue will decline this year as it faces the downside of higher interest rates.

It told shareholders “the economic outlook remains uncertain”. “We will monitor and react to market conditions and refine our internal forecasts as the economic position evolves.

It said growing numbers of its customers have been moving into fixed-term accounts to take advantage of the better rates offered leading to a squeeze on its profits. It is also warned its mortgage lending had been hit, falling to £29.8bn, down from £41.4bn in 2022.

NatWest set aside £126m for bad debt provisions

New CEO Paul Thwaite said NatWest was focusing “on the things we can control.” That includes being more efficient, productive and managing its cost and capital, he said.

Prior to his taking over from Alison Rose, he was chief executive of the bank’s commercial & institutional segment and payments business, having previously led the commercial banking division as CEO since November 2019.