NatWest will make a fresh £190m payout to its largest shareholder, the UK government, after Downing Street had an influence in the resignation of Alison Rose as the bank’s chief executive amid a row over Nigel Farage’s accounts.
The crisis-hit group said it was planning to pay dividends worth £500m to its investors after another strong quarter in which pre-tax profits rose by a higher than expected 27% to £1.8bn in the three months to June. That was compared with £1.4bn a year earlier, as the bank benefited from rising interest rates that allowed it to charge borrowers more for loans and mortgages.
The shareholder payout will benefit the UK government, which still holds a 38.5% stake in the lender after its £45m state bailout during the 2008 financial crisis. NatWest also announced a £500m share buyback on Friday morning but that will only benefit investors whose shares are traded on the public stock market, meaning it will not affect the taxpayer’s stake.
It comes during a chaotic week for NatWest Group after the departure of Rose and the ousting of the boss of its private bank Coutts, which triggered a scandal after closing Farage’s bank accounts earlier this year.
Their departures followed interventions by the chancellor and the prime minister this week, who made it clear they wanted change at the top of the bank.
NatWest made a single mention of Rose in its financial results on Friday, saying only: “On 25 July 2023, Alison Rose stepped down as chief executive officer and as a director of NatWest Group.” The bank’s commercial banking boss, Paul Thwaite, has been appointed as the interim chief executive.
NatWest’s chief financial officer, Katie Murray, commended the bank’s “strong performance” and said it had been able to “continue lending to our customers and delivering sustainable returns and distributions to our shareholders, even in the current uncertain environment”.