NatWest to pay out £350m bonus pot as ministers prepare share sale
NatWest Group is preparing to pay out about £350m in staff bonuses as the government draws up plans for a retail share offer that could drastically reduce the state’s remaining stake in the bailed-out lender.
Sky News has learnt NatWest is finalising proposals for the bonus pot ahead of annual results this week that are expected to reveal its most profitable year since its rescue by British taxpayers.
The payouts will be slightly below last year’s figure of £367m despite City forecasts of higher profits buoyed by rising interest rates.
The announcement of NatWest’s results, which will be overseen by interim chief executive Paul Thwaite, will follow a tumultuous year for the bank.
2023 was dominated by the row which erupted last summer over the ‘debanking’ of Nigel Farage, the former UKIP leader.
After initially insisting that Mr Farage‘s Coutts accounts were closed for commercial reasons, he obtained records demonstrating that his political views were the dominant factor in the decision.
Dame Alison Rose, who briefed the BBC on an inaccurate story about the issue, paid the price with her job.
She ultimately forfeited more than £7m in bonus and long-term incentive payments as a consequence.
NatWest’s board, which will soon be chaired by Rick Haythornthwaite, the boardroom veteran who also chairs Ocado Group and the AA, is now working with headhunters on the appointment of a permanent successor.
Last week, officials at UK Government Investments, which manages the taxpayer’s 35% stake in the lender, said finalising Dame Alison’s replacement was a prerequisite for the launch of a mass-market share sale.
Jeremy Hunt, the chancellor, announced in his autumn statement that he wanted to oversee a retail offer to millions of Britons that would replicate the ‘Tell Sid’ privatisations of the 1980s.
A retail offer will be launched in June at the earliest, UKGI has said.
The issue of bonus payments at NatWest has been contentious ever since the company was rescued with a £45.5bn injection of capital funded by taxpayers in 2008.
Then called Royal Bank of Scotland, its journey to the brink of outright collapse came to symbolise the excesses of the banking system during a period of light-touch regulation.
The bank has since been stabilised to the point of normality after a series of brutal restructurings, asset sales and fines for misconduct.
In recent years, its bonus pot has generally hovered at a level between about £300m and roughly £400m, reflecting its status as a ‘back-marker’ on banking sector pay.
NatWest has also capped cash payments at £2,000 each year since its bailout.
The Treasury does not have a formal veto over bonuses at NatWest, although the bank’s board would be unlikely to sanction them without tacit approval.
NatWest has radically scaled back its investment bank since its rescue nearly 16 years ago.
A spokeswoman for the bank declined to comment.