RBS owner NatWest takes £24m hit from axed share sale but says customers ‘more positive about their finances’

NatWest’s chief executive said the bank’s customers “are beginning to feel more confident” as the RBS parent group unveiled first-half profits of £3 billion.

Paul Thwaite’s comments came as the financial giant also revealed it had spent £24 million on shelved Conservative government plans for a retail share sale in the bank. The group’s bill for the “Tell Sid”-style campaign comes after it was forced to pay for advertising and preparations for the share sale, which had been due to launch in the summer before the announcement of a general election on July 4.

NatWest generated a pre-tax operating profit of £3bn for the six months to the end of June. While this was 16 per cent down on a year earlier it was a stronger result than had been expected in the City. It declared an interim dividend of 6p per share, up 9 per cent on the year before.

NatWest Group was formerly known as Royal Bank of Scotland and remains the parent company of RBS.

Thwaite said: “We have made good progress against our strategic priorities, taking decisive action to grow and simplify our business and to manage our capital and costs more efficiently. Our customers are beginning to feel more confident, with activity increasing and asset quality remaining strong, and we are well positioned to help unlock growth across the UK through our unrivalled regional network.”

He added: “With inflation falling and employment remaining high, customer confidence continues to rise. Many households are starting to feel more positive about their finances.”

Thwaite said he would expect any announcement about a potential retail share sale to come in the new government’s next fiscal event, although he stressed it was a decision to be made by the Treasury.

NatWest, which has some 19 million customers, also announced it had agreed to buy around £2.5bn worth of residential mortgages from Metro Bank for £2.4bn in cash, which will see it add around 10,000 borrowers to the group. It follows NatWest’s move to buy the bulk of Sainsbury’s banking business in June, adding around £1.4bn of unsecured personal loans, £1.1bn of credit card balances and about £2.6bn of customer deposits.

John Moore, senior investment manager at wealth firm RBC Brewin Dolphin, noted: “Overall, the bank appears to be in healthy shape, with good cost discipline and a growing balance sheet. All of this looks positive for NatWest and is providing a foundation for a recovery in its share price, which is up more than 50 per cent in the last six months - albeit, the prospect of the retail offer for the government’s remaining stake, will likely temper too much progress for now.”

NatWest has seen the taxpayer stake in the group drop to below 20 per cent in recent weeks, down from around 38 per cent in December, as the UK government continues to sell down its shareholding. The bank - formerly known as Royal Bank of Scotland - was at one stage 84 per cent owned by the taxpayer after a mammoth £46bn bailout at the height of the financial crisis.

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