NatWest: Profits surge as CEO Alison Rose pockets annual bonus for first time since bailout

Royal Bank of Scotland owner NatWest Group has seen its profits surge by more than a third to the highest level since the financial crisis and revealed its chief executive received a pay packet totalling £5.25 million.
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The banking giant, which remains about 46 per cent owned by the taxpayer, took in more income in 2022 as it ramped up mortgage lending amid a higher interest rate environment. Chief executive Dame Alison Rose insisted that the lender has not yet seen significant signs of stress among customers, despite being “acutely aware” that many people and businesses are struggling through the cost-of-living crisis.

The group’s operating pre-tax profits reached £5.1 billion over the year, up 34 per cent from £3.8bn in 2021. Rose took home £5.25m over the year as she received an annual bonus for the first time since the bank’s bailout by the UK government during the 2008 financial crisis. It was the first year of NatWest’s new executive pay policy which is more closely linked to performance, and resulted in Rose’s pay package increasing by a tenth.

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The group also ramped up the bonus pool for its bankers by nearly £70m in 2022, to total £367.5m. NatWest, which announced an £800m share buyback programme, said the new pay policy is more competitive and helps it to attract and retain highly talented staff.

Rose said: “NatWest Group delivered a strong performance in 2022. We made considerable progress against our strategic goals, maintained a well-balanced loan book and distributed significant capital to our shareholders, including the UK government. Despite not yet seeing significant signs of financial distress among our customers, we are acutely aware that many people and businesses are struggling right now, and that many more are worried about what the future holds. Our robust balance sheet, responsible lending and continued capital generation allow us to proactively support those who need it whilst helping others to get ahead of the challenges to come.”

John Moore, senior investment manager at RBC Brewin Dolphin, noted: “If Barclays’ results earlier in the week were a lesson in grabbing defeat from the jaws of victory, NatWest shows how far a bit of self-help can take you. It is growing into a very different bank from the one that has effectively been in government ownership for the last 15 years. NatWest is streamlining, benefiting from an improved net interest margin, and has improved confidence and innovation in writing business all of which is delivering greater returns to shareholders - with the dividend supplemented by a share buyback programme.”

Michael Hewson, chief market analyst at CMC Markets UK, added: “The bank proposed a final dividend of 10p as well as a share buyback programme of £800m in the first half of 2023, taking the total amount paid to shareholders to £5.1bn, or 53p per share, which is good news for the UK government. This equates to a windfall for the UK government of £2.25bn, on top of the ordinary tax take which includes the bank levy and corporation tax.”

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