Nat West

Sisyphean_Task

NatWest have announced their results today. If you were wondering why your mortgage is high or your saving rate there is low, the 0.55% margin increase to 2.85% might explain it. It's 46% owned by taxpayers, don't we love the £337m impairment charge and £367m bonus for bankers (up £70m this year)?

Britain's NatWest bank said annual profits rose by more than a third and unveiled a £800m share buyback as it cashed in on surging interest rates, despite a net impairment charge of £337m.
The lender, still 46% owned by the British taxpayer, on Friday posted pre-tax profit of £5.1bn for 2022, up 33.5% from £3.84bn a year earlier and in line with forecasts. It is the bank's biggest earnings since the financial crash of 2008 when it took a £45bn government bailout.

A final dividend of 10 pence was declared and NatWest continued to expect to achieve a return on tangible equity of 14-16%.

It added that the impairment charge "principally reflects the latest macro-economics, including updated scenarios and their associated weighting, with more weight being placed on the downside scenario. Underlying book performance remains strong, with credit conditions remaining benign and levels of default remaining low," NatWest said.

Net interest margin - the difference between what bank charges on loans and savings - rose 55 basis points to 2.85%.

NatWest also increased the bonus pool for its bankers by nearly £70m to £367.5m.

Chief executive Alison Rose said that despite not yet seeing significant signs of financial distress among the bank's customers amid the cost-of-living crisis "we are acutely aware that many people and businesses are struggling right now and that many more are worried about what the future holds

wmb194

So you're saying it's a good investment?

artyboy

That bonus pool is still chicken feed in the context of the industry. While I'm sure it would be nice to make Natwest wear a hair shirt for ever and insist it be run as a social enterprise, I'd prefer it to be run as a successful business to provide a return to the taxpayer.

If that means paying market rates to staff, then so be it.

Sisyphean_Task

wmb194 said:

So you're saying it's a good investment?

I don't know about that but a career in banking would seem to be a good option.

Sisyphean_Task

artyboy said:

That bonus pool is still chicken feed in the context of the industry. While I'm sure it would be nice to make Natwest wear a hair shirt for ever and insist it be run as a social enterprise, I'd prefer it to be run as a successful business to provide a return to the taxpayer.

If that means paying market rates to staff, then so be it.

You want a return to the taxpayer? How nice. Did you know that because of QE commercial banks now park about £1 Trillion overnight at the BoE and taxpayer's pay them the base rate on it? At 4% that's costing taxpayer's £40bn a year (that's the Treasury's  new funding gap we have to pay for with frozen personal allowances etc). It's been suggested that NatWest is the largest beneficiary of that policy because they have £150bn of it. At 4% base rate that's £6bn a year from taxpayers. Their profit that they are getting bonuses for, is our contributions!

https://www.thisismoney.co.uk/money/markets/article-11294319/Government-target-10bn-deposits-held-Bank.html

I only posted it in here because of the near 20% rise in their profit margin from 2.3% to 2.85%, it explains why saving rates haven't gone up more recently with the base rate rises, unlike mortgage rates. That's taxpayer's paying them more on mortgages but not getting a decent rate on savings, despite us paying them 4% on their "savings" at the BoE! 

eskbanker

As bonuses should be largely conditional on business performance, bumping up the pot by about a quarter when profits have risen by over a third seems reasonable to me, even if tabloids like to spit out the words "banker's bonuses" as if it was pantomime season ("boooooooo")....

artyboy

eskbanker said:

As bonuses should be largely conditional on business performance, bumping up the pot by about a quarter when profits have risen by over a third seems reasonable to me, even if tabloids like to spit out the words "banker's bonuses" as if it was pantomime season ("boooooooo")....

Indeed, I think we'll be onto a loser with the OP, however rational an argument is offered. Me and my ilk should all be put up against a wall and shot. That will make us work harder eh...

jimjames

Sisyphean_Task said:

NatWest have announced their results today. If you were wondering why your mortgage is high or your saving rate there is low, the 0.55% margin increase to 2.85% might explain it.

As someone with a Natwest 0% credit credit they're certainly not making increased margin from me. Don't moan about low rates, take action to move to one of the plenty of available accounts with better interest.

wmb194

jimjames said:

Sisyphean_Task said:

NatWest have announced their results today. If you were wondering why your mortgage is high or your saving rate there is low, the 0.55% margin increase to 2.85% might explain it.

As someone with a Natwest 0% credit credit they're certainly not making increased margin from me. Don't moan about low rates, take action to move to one of the plenty of available accounts with better interest.

Nor me: the only savings I have with NatWest and RBS are earning 6% in their respective Digital Regular Saver accounts.

Perksy5

Complain about bonuses all you want but it is key for talent retention. It's industry wide, you don't love it because you don't benefit from it but the alternative is slashing it, talent goes elsewhere and the taxpayer investment you're bleating about burns and crashes. 
At least this way its paying a dividend, it might not ever amount to the £45bn originally bailed out if share price has fluctuated (I haven't looked) but its a profitable business based on these results. I'm happy the tax payer hasn't entirely wasted its money. If it was failing, then I'd join you in stomping my feet.

anna42hmr

i would point out however whilst its clear the media like to make "bankers bonus'" a talking point and to make them look like the bad guys for paying out the majority of these payments will get no where near the large sums they refer to, more like the large portions of branch staff, office staff, telephone banking staff on relatively low wages receiving a bonus for the work they have done during the year.  so no i don't begrudge the majority of the staff population receiving a bonus in they same way i don't begrudge other industries staff their bonuses, staff discounts etc.