Retail banking giant Natwest raked in its highest profits since before the financial crisis today as it raked in cash on the back of higher interest rates.
In its full year results this morning, the scandal-hit lender said it had notched an operating profit of £6.2bn for 2023, up 20 per cent on 2022’s figure.
The firm’s net interest margin, the gap between what a bank is earning in interest compared to the amount it is paying in interest on deposits, surged 19 basis points to 3.04 per cent higher than 2022 after the Bank of England scaled up the base rate through the year to tackle inflation.
The numbers cap off a tumultuous year for Natwest in which it was forced to sack its chief executive Dame Alison Rose over the Nigel Farage debanking scandal.
The bank confirmed that Paul Thwaite would permanently succeed Rose today. In a statement, he said it had been a “strong performance in an exceptional macro environment” for the bank.
“The strength of our balance sheet allows us to support our customers and our performance is grounded in the services we have provided to help them reach their financial goals and manage their money better,” he added.
“As we look ahead, I am ambitious and confident for the future of NatWest Group. We should not underestimate the strength of our foundations or the opportunity to build deeper relationships with our 19 million customers.”
The bank would this year be focused on “the things we can control” including managing its “cost and capital efficiently” and delivering profits, Thwaite added.
The company also reported a five per cent increase in costs in the year.
Off the back of its numbers today, bosses rolled out a final dividend of 11.5p per share, giving a total dividend for the year of 17p per share, up 26 per cent on 2022.
The bank said it will look to return 40 per cent of attributable profit to shareholders via dividends in 2024 and will look to buy back more shares from the UK Government if and when possible. It also said it will try to buy back shares on the market with any available capital.
Shares in Natwest have slumped over the past year as the government gears up to offload its remaining stake in the bank into the hands of the public, as part of a drive to reignite a culture of equity investment.