Board secures vote

NatWest bosses win pay hike, pledge to help customers

Howard Davies: committed to helping customers (pic: Terry Murden)

NatWest chairman Howard Davies pledged to support customers caught in the grip of the cost-of-living crisis as shareholders backed a huge hike in the pay of its senior executives.

The board avoided a shareholder rebellion at the bank’s AGM in Edinburgh despite calls by investor groups to oppose a controversial new pay policy that could see its chief executive, Alison Rose, receive as much as £5.2m a year.

The policy will increase Ms Rose’s potential bonus payouts by 25%, and result in a 43% rise for finance chief, Katie Murray, by 2023.

NatWest said it would bring executive pay closer to levels offered by rival UK banks.

Commenting on the impact of the cost of living crisis, Sir Howard said: “Inflation, which was already on a steep trajectory at the end of 2021, looks set to continue to rise as the reverberations from the invasion of Ukraine have a direct impact on prices – especially of energy and commodities.

“We are very conscious of the effects this will have on the increased cost of living for many of our customers, and we are committed to helping them where we can.”

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He apologised to shareholders for failing to prevent money laundering at the group between 2012 and 2016.

NatWest was fined £264 million after pleading guilty last year over breaches of anti-money laundering regulations.

“NatWest Group takes its responsibility to prevent and detect financial crime extremely seriously,” he said.

“We deeply regret that we failed adequately to monitor one of our customers between 2012 and 2016 to prevent money laundering. And while the case has now come to an end, we continue to invest significant resources in the ongoing fight against financial crime and fraud.”

Ms Rose also expressed her concerns over inflation and said the bank was increasing efforts to support UK families and businesses.

Alison Rose at the AGM: ‘we are providing help and support’ (pic: Terry Murden)

She said: “We are not seeing any significant signs of financial distress in our book at this stage. We are, however, very aware of the challenges and concerns the cost-of-living crisis is causing for many of our customers up and down the country.

“Therefore, in line with our approach throughout the pandemic, we are focussed on providing the practical help and support that people, families and businesses need to thrive.”

She said this would include financial health checks and support for small and medium-sized businesses to manage their finances.

The bank’s share price also recovered throughout the year, increasing by around 35%, outperforming the UK banks average,.

The bank distributed £3.8 billion to shareholders, through buybacks – both directed and on-market – and dividends. It also announced that it would distribute at least £1 billion in dividends annually to 2023.

The government stake reduced from 62% at the start of 2021, to less than 53% by the end of 2021, and it is now around 48%.

No plan to remove RBS sign, says Rose (pic: Terry Murden)

Sir Howard said: “While the move below 50% has little practical impact on our governance or operations, it was an important symbolic moment – a marker of how far we have come, the changes we have made since 2008 and lessons we have learned on the way,” said the chairman.

The meeting took place at the Gogarburn HQ a day before NatWest unveils its interim results, with analysts predicting pre-tax operating profits set to fall 20% to £755 million.

Before the meeting, Ms Rose told Daily Business the bank was committed to the Edinburgh campus – even though occupancy was still only 15-20% as staff adopt a hybrid working model.

Ms Rose said there was also a commitment to retaining the Royal Bank of Scotland name on the building, despite it now being the headquarters of NatWest Group.

“We are never going to put NatWest on the wall,” she said.

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