Acquisition talk

NatWest CEO ponders deals as banks consolidate

Paul Thwaite
Paul Thwaite says he would expect more activity

Natwest chief executive Paul Thwaite has said the bank could be involved in further consolidation in the UK banking market.

In a signal of the bank’s renewed confidence, Mr Thwaite told the Goldman Sachs European Financials Conference in Madrid that it would “review opportunities” to grow through acquisitions.

“It’s been interesting, but not a surprise, to me to see some of the activity in the UK market,” he said, adding that he felt there was a degree of “inevitability” about recent tie-ups, given some of the “structural profitability challenges” in parts of the UK market.

This year has seen Barclays buy out most of Tesco Bank, while Nationwide Building Society is swallowing Virgin Money and Coventry Building Society has agreed to a takeover of The Co-operative Bank which last year acquired Sainsbury’s Bank’s mortgage book.

“I think there will be more consolidation as we go through,” Mr Thwaite added. “I think we’ll see more consolidation over the course of the next couple of years.

“We’ll be very disciplined, we’ll be very focused.”.

The bank, trading as Royal Bank of Scotland north of the border, will introduce more automation which may divide opinion among employees and customers but will provide more opportunities for the fintech sector.

Mr Thwaite said he wanted to digitise and automate more of the bank’s engagement with customers, which could include reducing the reliance on call centres. NatWest relies on artificial intelligence (AI) for certain features, such as its chatbot named Cora, which took care of nearly 11 million customer queries last year.

NatWest downsized its executive committee in March, from 15 to 10 members. He said that simplifying the leadership team would have a “cascading effect” throughout the bank, accelerating decisions and eliminating overlapping responsibilities.

“While we’ve made an awful lot of positive progress, I’m still confident there is a fair bit to go on the productivity and efficiency front,” he said.

Commenting on the delay to the retail offer for the taxpayers’ remaining shares in NatWest, he said: “Given the progress we’ve made … I’m pretty pleased with the trajectory and we’ll hit that plan, irrespective of whether a retail offer happens or not.”

The Government’s plan for a public sale this summer was interrupted by the calling of the General Election on 4 July. Labour’s Shadow Chancellor Rachel Reeves told reporters in Edinburgh on Tuesday that she had no plans to deviate from the government’s plan should Labour win the election.

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