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.

The banking giant’s pre-tax profits rose by a fifth to £6.2bn in 2023, its best performance since it made £9.3bn in 2007 and around £200m above analysts’ forecasts.

Higher interest rates and lending volumes helped boost the company’s total revenue by 9.8 per cent to £14.75 billion and offset the impact of higher impairment charges.

The Bank of England raised the U.K. base rate a further five times last year to try to curb inflation before keeping it at 5.25 percent, providing a continued windfall for Britain’s banking sector.

As a result, NatWest’s net interest margin – the difference between what banks charge on loans and what they pay on deposits – rose by 19 basis points to 3.04 per cent.

Following the excellent performance, the Edinburgh-based lender intends to carry out a further £300m share buyback and recommends a final dividend of 11.5p per share.

In his first annual results as chief executive, Thwaite said the company “delivered strong performance in an exceptional macroeconomic environment”.

Rick Haythornthwaite, Chairman Designate of NatWest Group, added: ‘Paul has demonstrated an unparalleled understanding of this business, our customers and the opportunities for growth.

“We are both ambitious for this organisation, and I fully expect that his powerful combination of NatWest knowledge and a thoughtful and imaginative leadership approach will prove key to forging success in the rapidly changing banking landscape.”

Thwaite headed NatWest’s corporate banking division until July last year, when he became interim chief executive following the resignation of Dame Alison Rose amid a “dispossession” row.

Rose admitted leaking information to a BBC journalist about the closure of Nigel Farage’s bank accounts.

The former UK Independence Party leader claimed his accounts at Coutts, a subsidiary of NatWest, 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 that the bank had not broken the law with its actions, but criticized the company for “serious failings” in its treatment of Farage.

NatWest Group Shares They were up 3.2 per cent on Friday morning at 221.2p, although they have fallen about 27 per cent in the last 12 months.

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

‘While net interest income appears to have peaked, there are enough tailwinds on the horizon for the sector to merit attention at current valuations. NatWest’s scandal-ridden end to 2023 means its valuation is even more attractive.’

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