According to Paul Thwaite, the CEO of NatWest, the British banking giant is probably going to go back to being fully privately owned in 2025. The move, once completed, will enable the financial venture to expand its wealth management division.
“It is reasonable to expect that absent some big dislocation or economic event we’ll be back in private ownership next year, maybe as early as the first half of the year,” Paul Thwaite said, as reported by the Financial Times (FT).
The Keir Starmer-led United Kingdom government’s ownership of the bank has decreased from 38% a year ago to less than 11%. Since the 46-billion-pound bailout of NatWest during the global financial crisis, when the bank was still known as RBS, the state has owned a portion of the company.
“I think it will be a symbolic moment for the sector. It means we can talk about the future of the bank, the potential of the bank rather than having to talk about its past,” Paul Thwaite said.
Thwaite stated that after NatWest repurchased some of the state’s shares this year, going back to private ownership would also enable the bank to allocate capital more strategically.
According to him, one area of special attention would be expanding the bank’s wealth management division, which includes private bank Coutts, first through organic growth. Future acquisitions were not ruled out.
“The two transactions we’ve done this year have shown that we’re on the front foot and where we see interesting opportunities that deliver good financials, good strategic fit, then we’ll take them,” the NatWest boss added.
Thwaite, who was appointed permanent CEO after serving as interim CEO in July 2023, has seen NatWest acquire the majority of Sainsbury’s Bank and 2.05 billion pound in prime residential mortgages from Metro Bank.
Prior to this, the United Kingdom government had promised to put the bank back into private ownership by 2025 or 2026. Additionally, Labour abandoned the previous government’s plans to sell NatWest shares to the general public, which had already begun when it was elected in July 2024 and had cost the bank 24 million pound.
The October announcement of the Labour government’s budget received widespread support from Thwaite. According to him, British regulators could do more to encourage growth, but the government’s emphasis on science, infrastructure, and planning would help sustain economic expansion in the medium run.
“I think there are levers that regulators can pull which don’t risk the stability of the system, don’t necessarily risk protection of consumers,” he said, in reference to areas such as the ringfencing regime and regulations on fraud and customer complaints.
Who Is Paul Thwaite?
In July 2023, Paul Thwaite became the Chief Executive Officer. Before being hired, he served as the Chief Executive of the Commercial and Institutional (C&I) division, which brought together the teams that assisted NatWest’s business clients, which ranged from start-ups and entrepreneurs to multinational corporations and financial institutions.
Under Paul’s direction, C&I, which was in charge of establishing the strategy, vision, and culture for several companies, brands, and entities, provided long-term sustainable growth and value to its clients as a reliable partner.
In addition to his unwavering focus on the customer experience, Paul brings strong expertise in risk management, balance sheet management, and strategic transformation. His contributions to the Group’s strategy reviews in 2014 and 2019 were crucial, and he has spearheaded the creation and implementation of several initiatives and programmes that are at the forefront of their respective industries.
Most notably, he oversaw the Group’s response to helping companies during the COVID-19 pandemic and was in charge of NatWest’s integrated payments and embedded finance strategy. Paul has actively promoted talent throughout his career, assembling and managing diverse teams from various disciplines and geographical locations to meet the needs of clients and other stakeholders.
NatWest Remains On Track For Privatisation
The British banking group will keep on exploring “strategically congruent” and “financially compelling” M&A (merger and acquisition) opportunities after a flurry of investments in 2024, Paul Thwaite told during the FT Global Banking Summit, as he informed the audience of his having “lots of potential uses” for the bank’s excess capital but would be thoughtful about its deployment, whether supporting growth in existing businesses or pursuing additional “inorganic tuck-ins,” like the deal struck to buy the banking business of retailer Sainsbury’s in June.
NatWest in November 2024, bought back 1 billion pounds (USD 1.29 billion) worth of its shares from the Keir Starmer government, in another move towards privatisation. UKGI, which manages the government’s stake in the bank, said as a result of the transaction the government’s ownership would fall from around 14% of the company to around 11%.
“This transaction represents another important milestone on the path to full privatisation. We believe it is a positive use of capital for the bank and for our shareholders,” Paul Thwaite said during the occasion.
The transaction was the second such directed buyback in the last 12 months, and brought the total of its shares NatWest bought from the British government in 2024 to 2.2 billion, representing nearly 8% of its capital.
NatWest is also gearing up for its post-privatised future, as it has launched the “FinTech Growth Programme,” which will give the newly-formed fintech companies the resources, networks and expertise of a large bank, with the hope that participants will help bolster NatWest’s innovation efforts.
“This programme lays a pathway to create better outcomes for our customers. Working this closely with fintechs and UK entrepreneurs strengthens our ability to be future focused, while supporting the growth of the innovation economy,” said David Grunwald, director of NatWest Innovation.
NatWest plans to pick five fintechs that offer solutions for specific problems in the digital payment sector. Participating start-ups should be based in the United Kingdom and pre-Series A stage.
During 10 weeks of workshops, mentoring and coaching, NatWest will work with these fintechs to co-create solutions to lead the future of banking, whereas the participating fintechs will earn the opportunities to connect, learn and build networks with other fellow fintechs, coaches and NatWest’s dedication Innovation function.