This week, NatWest will hold its last annual shareholder meeting before returning to full private ownership, with the government expected to sell its remaining stake in the bailed-out bank in the coming weeks. The bank, formerly known as Royal Bank of Scotland (RBS), will host shareholders on Wednesday at its sprawling Gogarburn campus in Edinburgh, the £350m complex that became a symbol of the excesses that led to RBS’s £46bn bailout in 2008. Once known for cavernous offices featuring deep-pile carpets and expensive artwork under the disgraced former boss Fred Goodwin, Gogarburn is now a hub for executives proudly declaring a restrained approach to banking. Speaking to shareholders during a virtual event earlier this month, the chief executive, Paul Thwaite, said he was “not seeking to dramatically change the shape of our business or the amount of risk we are willing to take”. While the chancellor, Rachel Reeves, is pushing for more risk-taking across the City that could help kickstart growth, ministers will find some comfort in the fact that NatWest will be left in a much stronger position than it was 17 years ago. The Treasury spent almost £46bn to bail out RBS at the height of the financial crisis in 2008, leaving taxpayers owning about 84% of the lender. It faced a long turnaround, during which banker bonuses were capped and bosses were forced to slim down the business and slowly sell off its international operations. That government stake has rapidly dwindled in recent years through a combination of sales to institutional investors and a drip-feeding of shares into the open market. NatWest fast-tracked the process through multibillion-pound share buybacks. That stake has dropped from 40% in December 2023 to 2.99% as of last week. “Returning the bank to full private ownership is an ambition we share with the government, and one that we believe is in the interests of all our shareholders,” a NatWest Group spokesperson said. Still, the government is only expected to recoup about £25bn of the £46bn it spent rescuing NatWest in 2008, having bought shares at 500p. NatWest stock briefly hit 480p in March, days before Donald Trump’s shock tariff announcements caused stock markets to plunge. NatWest bankers are already eyeing bigger payouts as the bank moves into private hands. Under a new pay policy, the board is planning to increase Thwaite’s maximum pay by 43%, giving him the chance to earn up to £7.7m a year. That figure could soar to £9.5m if there was a 50% rise in NatWest’s share price – given much of the payout is linked to long-term bonuses made up of the bank’s own stock. Thwaite was appointed chief executive last year, having replaced Alison Rose on an interim basis after she was forced to quit amid a debanking row with Nigel Farage. Thwaite previously led NatWest’s business banking division. The bank’s new pay policy will be put to NatWest shareholders on Wednesday.
Author: Kalyeena Makortoff Banking correspondent