NatWest confirms Thwaite as CEO as lender posts highest profit since 2007

NatWest Group has confirmed Paul Thwaite as its permanent chief executive, as the lender posted its highest annual profit since the global financial crisis.

NatWest boss Paul Thwaite 

The banking giant’s pre-tax profits jumped by a fifth to £6.2billion in 2023, its best performance since making £9.3billion in 2007 and around £200million above analyst forecasts.

Higher interest rates and lending volumes helped boost the firm’s total income by 9.8 per cent to £14.75billion, and offset the impact from larger impairment charges.

The Bank of England increased the UK base rate another five times last year to try and dampen inflation before holding it at 5.25 per cent, providing a continued windfall for Britain’s banking sector.

Consequently, NatWest’s net interest margin – the difference between what banks charge on loans and pay in deposits – increased by 19 basis points to 3.04 per cent.

Following the bumper performance, the Edinburgh-based lender intends to conduct a further £300million share buyback and is recommending an 11.5 pence per share final dividend.

In his first annual results as chief executive, Thwaite said the company ‘delivered a strong performance in an exceptional macro environment’.

Rick Haythornthwaite, chair designate of NatWest Group, added: ‘Paul has shown an unrivalled understanding of this business, our customers, and the opportunities for growth.

‘We are both ambitious for this organisation, and I fully expect his potent blend of NatWest knowledge and thoughtful, imaginative approach to leadership to prove key to forging success in the rapidly changing landscape of banking.’

Thwaite ran NatWest’s business banking division until July last year, when he became interim CEO following the resignation of Dame Alison Rose amid a ‘debanking’ row.

Rose admitted leaking information to a BBC journalist concerning the closure of bank accounts belonging to Nigel Farage.

The former UK Independence Party leader claimed his accounts at Coutts – a NatWest subsidiary – were closed due to his political views, while NatWest said the decision was because he failed to meet specific financial criteria.

An independent review commissioned by NatWest concluded the bank had not broken the law with its actions but lambasted the firm for ‘serious failings’ in its treatment of Farage.

NatWest Group shares were 3.2 per cent up at 221.2p on Friday morning, although they have slumped by approximately 27 per cent in the past 12 months.

Matt Britzman, equity analyst at Hargreaves Lansdown, said: ‘UK banks continue to suffer from a post-Brexit valuation slump.

‘While it looks like net interest income has peaked, there are enough tailwinds on the horizon to make the sector worth attention at current valuations. NatWest’s scandal-filled end to 2023 means its valuation is even more attractive.’

The UK Government plans to offload its 35 per cent stake in NatWest by early 2026, having spent £46billion of taxpayers’ money in 2008 to bail out the business, then called the Royal Bank of Scotland Group. 

This post first appeared on Dailymail.co.uk