NatWest unveils highest yearly profit since 2007

NatWest Group has revealed its highest yearly profit since just before the financial crisis in 2007.

The banking group reported a pre-tax profit of £6.2bn over 2023, higher than expected.

It also named Paul Thwaite as its permanent boss. He replaces Dame Alison Rose who resigned last year after admitting discussing the closure of Nigel Farage's bank account.

The board said he was the "right person" to shape the group's future.

It comes as the group is gearing up for a potential sale of shares to the general public, perhaps even as early as June.

The government still owns 35% of the bank since it bailed it out to the tune of £46bn during the financial crisis.

But UK Government Investments (UKGI), the company responsible for government investments, has been exploring a share sale since the chancellor announced plans in 2023.

Since NatWest, previously known as Royal Bank of Scotland, was bailed out in 2008, the government has been gradually reducing its shareholding in the bank. Shares have so far been sold to institutional investors and back to NatWest itself.

On Friday, the group said that its pre-tax profits for 2023 were up 20% on the year before and it announced a share buyback of £300m.

While higher interest rates have lifted revenues, it also warned that a tough economic picture could impact its future earnings.

NatWest said it would pay out £356m in bonuses to staff, down from £368m in the previous year.

In its annual report, also released on Friday, NatWest confirmed that Ms Rose will receive £2.4m in pay, pension contributions and benefits for her notice period which ends on 26 July this year.

Because she was not granted "good leaver" status when she resigned "by mutual agreement", Ms Rose will not receive £5.1m in share awards. She will also miss out on up to £2.8m in bonuses and other awards.

As well as a new chief executive, Richard Haythornthwaite has been appointed to succeed Sir Howard Davies as NatWest chair.

Mr Haythornthwaite is currently chair of Ocado, the grocery delivery group, as well as the AA motoring and insurance organisation.

He will step down from his other chairmanships when he takes on the role at NatWest on 15 April.

Sir Howard faced a backlash last year when he declared that NatWest's board had "full confidence" in Ms Rose after she discussed the closure of Mr Farage's account with a journalist at the BBC.

Just a day later, NatWest announced that Ms Rose would be stepping down.

Earlier this year, Sir Howard was criticised for claiming that it was not "that difficult" for first-time buyers to get on the property ladder.

He told the BBC: "I don't think it is that difficult at the moment," adding: "You have to save, and that is the way it always used to be."