NatWest Chairman Confesses to Confronting Unforeseen Difficulties in the Previous Year

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NatWest’s chairman, Rick Haythornthwaite, acknowledged at the bank’s annual general meeting on Tuesday that the financial sector is “evolving rapidly,” reflecting on the “unexpected challenges” faced by the lender during 2023.

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Speaking to shareholders, Haythornthwaite said: “Clearly, 2023 was an exceptional year that brought challenges for our customers, our sector, and the economy, as families and businesses faced the fastest rate rise cycle since the 1970s with persistently high levels of inflation. The year brought unexpected challenges for the bank, but our foundations and performance are strong – in fact, profits for 2023 were at the highest level they have been since before the 2008 financial crisis.”

NatWest reported its operating pre-tax profit for 2023 at £6.2 billion, its highest since the bank was bailed out by the UK Government during the financial crisis.

The year was marked by leadership turbulence following the debanking controversy involving former UKIP leader Nigel Farage, leading to the departure of chief executive Alison Rose and Peter Flavel, the head of its subsidiary Coutts.

Paul Thwaite, who was previously in charge of the bank’s commercial division, took over as chief executive. Speaking at the AGM in Edinburgh, Thwaite stated he feels a “great sense of responsibility” in his new role and outlined plans to make the bank more efficient through simplification and increased use of technology such as automation and artificial intelligence (AI).

Thwaite highlighted efforts to streamline operations, saying, “A bank-wide exercise in 2023 identified over 100 priority use cases for AI to address manual operations processes and wider controls. Ultimately, we want to build a NatWest Group that is simpler and more productive to better serve our customers.”

Haythornthwaite also touched on the UK Government’s plan to sell its remaining stake in NatWest to retail investors, indicating that this move will “bring an end to a sorry tale for the UK and for the bank.” This refers to the aftermath of the 2008 financial crisis, when the bank, then known as Royal Bank of Scotland, was rescued by taxpayer money.

The chairman clarified that while the government had less direct involvement in the bank’s affairs than often perceived, its eventual exit will remove a lingering “overhang.” The government’s ownership of NatWest currently stands at 29%, down from almost 38% at the beginning of the year.

The sale of shares to ordinary investors is expected to occur as early as this summer, with the government aiming to reduce its stake by 2025 to 2026.

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