NatWest is eyeing takeover targets as the lender prepares for a full return to private sector ownership, its chief executive said yesterday. The comments from Paul Thwaite came as speculation swirls over the future of the UK arm of Spanish bank Santander. Thwaite refused to comment on a report that NatWest had discussed a potential acquisition of Santander UK. But he said it would 'continue to look at inorganic opportunities' – jargon for takeovers.
It comes as reports persist about the future of Santander's UK arm despite the Spanish lender repeatedly insisting it is not for sale. High Street lender TSB could also be on the table in the coming months if a hostile takeover of its owner Sabadell by rival BBVA succeeds. Such a takeover would raise doubts about the future of TSB under BBVA's ownership. NatWest last year acquired Sainsbury's banking business and a chunk of mortgage loans from Metro Bank.
Expansion plans: NatWest is eyeing takeover targets as the lender prepares for a full return to private sector ownership, according to Paul Thwaite. Thwaite said yesterday: 'In respect of acquisitions, it's a very high bar. 'Any acquisition needs to be financially compelling for shareholders, but it also needs to be strategically compelling.'. His remarks came as NatWest posted a pre-tax profit of £6.2bn for 2024, which was up 0.3 per cent on the prior year.
It is expecting to return to full private sector ownership in the first half of this year, for the first time since a £45.5billion bailout by taxpayers during the 2008 financial crisis. The Government took an 84 per cent stake as part of the rescue deal and since then has been steadily selling down the holding. The Treasury stake now sits at just under 7 per cent, down from around 38 per cent at the end of 2023.
Thwaite yesterday urged ministers to reassess banking regulations, introduced in the wake of the financial crisis, as ministers look for ways to boost economic growth. The chief executive said ring-fencing rules which keep customer deposits separate from money used in other banking activities could be modified. 'Ring-fencing served a critical purpose at the time. Obviously, regulation has moved on considerably since then,' Thwaite said. 'Nobody wants to jeopardise the safety and security of the system. But I do think there are further changes or opportunities around ring-fencing when we look out over the next couple of years.'.
Chancellor Rachel Reeves has made cutting financial red tape a key part of her economic growth plan and this week met bank chiefs including Thwaite to discuss possible changes. NatWest's results came as it revealed plans to hike its chief executive's pay by over 43 per cent to a maximum of £7.7m. Thwaite was paid £4.9m in 2024, which was his first full year in the role. He has led NatWest since July 2023 when Alison Rose quit after admitting she had been the source of a BBC story regarding the banking arrangements of Reform UK leader Nigel Farage at NatWest-owned private bank Coutts.
Zoe Gillespie, investment manager at RBC Brewin Dolphin, said that NatWest was in 'fine fettle' and that the return to full private ownership could mean 'new opportunities may open up'. Shares, which have doubled in the past year, fell 2 per cent, or 8.9p, to 428.1p yesterday. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
