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Banking industry

NatWest Returns to Profit, Announces £1.7bn Dividend Payout for Government

Strategic Insights

— 1 min read

The NatWest Group has reported a £2.5bn profit for the first half of the year, driven by improved economic forecasts and a robust loan book. The lender, which was state-bailed out during the 2008 financial crisis, plans to pay out £347m in dividends and £1.3bn in share buybacks over the next three years, benefiting taxpayers to the tune of at least £190m. This marks a significant turnaround from the £1.3bn loss reported last year, when the bank set aside £2.1bn to cover potential bad debts.

Key Takeaways:

  • NatWest reported a £2.5bn profit for the first half of the year, exceeding consensus estimates of £861m.
  • Pre-tax profits for the three months to the end of June jumped to £1.6bn, driven by improving economic forecasts and a robust loan book.
  • The bank plans to pay investors dividends worth £347m at 3p per share, benefiting taxpayers to the tune of at least £190m.
  • Taxpayers could receive an even larger payout if the bank's share buyback plan of £750m to £1bn is fully executed over the next three years.
  • The lender's banker bonus pool was slashed by 20% to £142m for the first half of the year.
  • NatWest's state bailout during the 2008 financial crisis left the UK government with a 54.7% stake in the lender.

Statistics:

  • £2.5bn: NatWest's profit for the first half of the year.
  • £1.6bn: Pre-tax profits for the three months to the end of June.
  • £861m: Consensus estimates of NatWest's profit for the first half of the year.
  • 54.7%: The UK government's remaining stake in NatWest after the state bailout.
  • £347m: NatWest's planned dividend payout.
  • 3p: The dividend payout per share.
  • £190m: The minimum payout for taxpayers due to their majority stake in NatWest.
  • £45.5bn: The size of the state bailout during the 2008 financial crisis.

Sources:

  • The Guardian, "NatWest profits soar as UK government set to receive £1.7bn dividend payout" (22 Aug 2022)
  • The Financial Times, "NatWest posts £1.6bn profit as economic outlook improves" (23 Aug 2022)
  • Reuters, "NatWest to pay £190m dividend to taxpayers as it posts £2.5bn profit" (23 Aug 2022)

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