Profits at 45% state-owned bank NatWest have risen to their highest since the global financial crash.
The bank recorded profits of £5.1bn before tax in its 2022 full-year results, a high not seen since 2007.
Also for the first time since the crash was the payment of a £5.25m bonus to its chief executive, Dame Alison Rose. The last time bonuses were paid at the bank was in 2008.
Shareholders will get a payout of 10p each per share, as an £800m share buyback scheme was announced meaning the bank will increase its own stake.
Higher interest rates, imposed on lenders by the Bank of England following the mini-budget market turmoil in an effort to lower inflation, have benefitted NatWest.
Profit has been boosted by those rates. Money earned on loans, minus the amount it pays in interest, increased. The margin rose from 2.3% in 2021 to 2.85% last year.
As interest rates rise and cost of living pressures weigh on households, NatWest has put aside £337m – less than the £434m forecast – for the year to prepare itself for the hit of customers who may default on loans but says levels of default remain low.
NatWest became state-owned in the wake of the global financial crash when the government bailed it out. At the time it as known as the Royal Bank of Scotland group.
Higher profits and a rising share price may mean the government sells more of its stake.
