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End in sight to ‘sorry tale’, says new NatWest chair

Rick Haythornthwaite, left, with Paul Thwaite at NatWest’s AGM (pic: Terry Murden / DB Media Services)

NatWest chairman Rick Haythornthwaite today said “good progress” had been made on the government’s sale of its remaining shares in the bank, trading north of the border as Royal Bank of Scotland.

Addressing his first AGM at the bank’s Gogarburn headquarters in Edinburgh, Mr Haythornthwaite said he was confident that the bank will return to full private ownership under the current leadership and that it would put an end to the “sorry tale” of the past.

He said the government’s stake has fallen below 29% from 84% at the time of the 2008 bailout by the Labour government. Current Chancellor Jeremy Hunt has declared his intention to sell part of its remaining stock to the public.

Mr Hunt has indicated that a retail campaign would take place in the summer, at the earliest, if conditions are suitable. Those prospects are likely to be enhanced with stock markets currently buoyant and the FTSE 100 hitting a new intra-day high today.

Mr Haythornthwaite told shareholders: “Government ownership of NatWest now stands below 29%, having started the year at almost 38%.  And we are pleased that the government remains committed to fully exiting its NatWest shareholding by 2025 to 2026.

“This is a shared ambition which we believe is in the best interests of the bank and our shareholders. Good progress has been made in recent months and I am confident that this leadership team will see the return to full private ownership.

“The Chancellor used his Spring Budget last month to confirm the government’s intention to sell part of its shareholding to retail investors. He said the sale would take place this summer at the earliest, subject to supportive market conditions. 

“And we will work closely with UKGI and His Majesty’s Treasury if the government does decide to launch a retail campaign.

“Removing that overhang is of value but it also brings an end to what is a sorry tale for the UK and a sorry tale for the bank.”

Mr Haythornthwaite, who has succeeded Sir Howard Davies in the chair, told shareholders that he has inherited a bank that is “consistently profitable, significantly stronger and undoubtedly more customer focused”, adding that “where Howard was faced with fixing the issues of the past, I take on the role of chair with a mandate to help shape NatWest’s future.”

Paul Thwaite, who was also addressing his first AGM since replacing Dame Alison Rose as chief executive, said the bank was prioritising simplification, which meant focusing on investing into activity that improved efficiency and effectiveness. This has included consolidating five legacy systems into one.

He said the use of artificial intelligence (AI) offered “material opportunities” to pursue customer benefits and to increase efficiency. The bank has identified more than 100 “manual operations processes and wider controls” where AI could take priority.

“Ultimately, we want to build a NatWest Group that is simpler and more productive to better serve our customers,” he said.

Responding to a shareholder who noted that it was Dame Alison who switched the bank’s name to NatWest, Mr Haythornthwaite said the bank was fully aware of its Scottish heritage but there was no intention to revert the branding to Royal Bank of Scotland.

“We have moved forward,” he said.

Speaking to reporters after the meeting in response to the branch closures, he said he had not been into branch to undertake his own personal banking requirements for 25 years. “I have been digitally banking from the outset,” he said.

He also clarified that introducing AI into the bank would not mean job losses, but moving staff to “higher order tasks” and reskilling.

Mr Thwaite said that in a consolidating banking sector NatWest would “always look for opportunities” and noted a number of M&A deals concluded in recent times that have added capability or scale as required.

The meeting was attended by no more than a couple of dozen shareholders and was over in just 40 minutes. All resolutions were passed.

The bank will announce first quarter results on Friday and City analysts have forecast profits will have fallen to about £1.2bn from £1.8bn a year earlier following a boost to earnings brought about by rising interest rates this time last year.

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