NatWest is likely to pursue an acquisitions strategy in the new year, according to its chief executive Paul Thwaite.

Mr Thwaite said the bank, trading north of the border as Royal Bank of Scotland, will explore “strategically congruent” M&A deal opportunities.

This follows its £125 million purchase Sainsbury’s Bank in June which marked a key victory for traditional high street operators over challenger banks that had threatened to dethrone them after the 2008 crash.

The government is expected to sell its last tranche of shares in NatWest in the first half of 2025, enabling NatWest/RBS to return fully to the private sector for the first time since the taxpayer bailout that saved it.

The Treasury’s stake has fallen sharply over the past year from around 38% in December 2023 to just under 11%. A retail sale of the remaining shares, planned by the former chancellor Jeremy Hunt, was scrapped by his successor Rachel Reeves.

Mr Thwaite told the FT Global Banking Summit that he had “lots of potential uses” for the bank’s excess capital.

But he said deals needed to be “financially compelling” and any additions will aim to support growth in existing businesses, or be “tuck-ins” such as the Sainsbury’s purchase.

“I think it’s reasonable to expect that, absent some big kind of dislocation in economic events, we’ll be back to private ownership next year, maybe as early as the first half of the year,” Mr Thwaite stated.

He added: “The great thing about that is we’ve started to change the investor base. We’ve now got a lot international, long-only investors who are interested in the future of the bank.”