NatWest has reported a bigger-than-expected profit for 2024 as the bank edges closer to returning to private ownership.
Chief executive Paul Thwaite said shedding the Government’s shareholding would mark a “new, forward-looking chapter” for the British lender.
The group told investors it made an operating pre-tax profit of £6.2 billion last year, about 0.3% higher than in 2023.
This was slightly ahead of the £6.1 billion profit some analysts had been expecting.
NatWest said it benefited from lending growth during the year, with mortgage demand increasing as the property market improved and after acquiring Metro Bank’s loan book.
Our 2024 performance is grounded in the support we provide to over 19 million customers in every nation and region of the UK.
— NatWest Group (@NatWestGroup) February 14, 2025
Read more about our FY performance from our CEO Paul Thwaite: https://t.co/sbJi4fyFtn pic.twitter.com/GGQiy46Pfl
Deposits also increased year-on-year as savings balances grew, offsetting a decline in current account balances.
The retail bank nonetheless generated less income than in 2023, as borrowing costs started to come down and more people moved savings into accounts with higher interest rates.
This means the bank generates less from loans, but pays out more for savings.
Household savings continue to increase, and with interest rates coming down, spending is likely to pick up this year, Mr Thwaite suggested.
Sentiment “certainly dropped in the fourth quarter” of 2024, amid businesses reacting to tax policy changes announced in the autumn Budget.
“But I do think there are some grounds for optimism based on falling interest rates, falling inflation, stronger housing market and a pick-up in business investment,” he said.
Meanwhile, the Government’s stake in NatWest has dropped to below 7% as the bank continues on its path to privatisation, which it expects to reach during the first half of 2025.
Mr Thwaite said the bank is optimistic about opportunities to grow the business “as we enter a new, forward-looking chapter”.
He added it is continuing work to build a “simpler, more integrated and technology-driven bank” with it targeting cost savings across the business.
This saw the bank’s total workforce cut by more than 3% in 2024, incorporating a 10% reduction in workers across its retail banking operations.
This reflected fewer jobs in branches and call centres while it focuses on technology roles including more opportunities for artificial intelligence.
Separate accounts released by the bank show it handed out about £467 million in bonuses across eligible staff last year.
This was a quarter higher than the 2023 bonus pool of £356 million, which it attributed to a stronger financial business.
Rival bank Barclays, which has a bigger investment bank, said on Thursday it distributed £1.9 billion in bonuses to staff last year after growing its annual profit.
