NatWest has reported that its pre-tax profits jumped by 20% to £6.2bn in the year to December, the bank’s largest annual profit since the financial crisis.

This is the highest figure that NatWest has recorded since it made £10bn in 2007, before the bank was bailed out during the 2008 crisis for £45.5bn.

NatWest's total income, excluding notable items, was up 9.8% on 2022 at £14.3bn, having increased by £1.3bn, while total expenses were up 5%.

The bank also stated that a “disciplined approach” to capital allocation and balance sheet management allowed it to deliver £3.6bn of capital returns to shareholders in 2023, including an interim dividend of 5.5p at the half-year and a proposed final dividend of 11.5p – bringing the total for 2023 to 17.0p, a 26% increase on 2022.

NatWest was publishing its results on the same day that it confirmed the permanent appointment of Paul Thwaite as the group’s new CEO, following his initial appointment on a 12-month basis last July.

“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,” Thwaite said.

“As we look ahead, I am ambitious and confident for the future of NatWest.”

NatWest, which is still 35% owned by the Government, recently announced that the sale of its shares to the public could happen as soon as June.

Since it was bailed out in 2008, the Government has been gradually reducing its shareholding in the bank.

Shares have so far been sold to institutional investors and back to NatWest itself, but UK Government Investments (UKGI), the group responsible for Government investments, has been exploring a share sale since the Chancellor, Jeremy Hunt, confirmed the plans in his Autumn Budget last year.

Equity analyst at Hargreaves Lansdown, Matt Britzman, commented: “NatWest is out with a big profit beat as Paul Thwaite gets confirmed as permanent CEO. Impairment charges were better than expected as customers continued to show remarkable resilience in the face of higher inflation and interest rates. Absent any major shock to unemployment, low default rates are expected to continue over 2024.

“Retail customers continue to go in search of better rates from longer-term savings accounts. But crucially for NatWest, the pace of deposit migration was significantly slower in the fourth quarter than in the prior. Perhaps a sign that the peak in migration has come and gone – good news for net interest margins.”

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