NatWest to cut banker bonus pool as it reports £351m loss | NatWest Group

NatWest has cut its banker bonus pool to the lowest level since its financial crisis bailout, after swinging to a full-year loss in 2020.

The lender – formerly known as Royal Bank of Scotland – slumped to a loss of £351m for 2020 compared with a profit of £4.2bn a year earlier. The bank was stung by a surge in bad debt provisions, having put aside £3.2bn to cover a potential jump in defaults because of the coronavirus pandemic.

The loss ends three straight years of profit for the lender, which has struggled to stay out of the red since its £45bn bailout in 2008.

The bonus pool for NatWest bankers has been cut by 33% as a result, leaving staff to share £206m. It is the lowest total since it came into state ownership at the height of the financial crisis.

The bank, which is still 62% taxpayer-owned, paid its chief executive, Alison Rose, £2.6m for 2020. Rose voluntarily waived her bonus in light of the Covid-19 crisis.

However, the bank is restarting its dividend after the Bank of England lifted its temporary ban on shareholder distributions in December to allow limited payouts. NatWest’s rival Barclays has also resumed payouts.

NatWest plans to pay out £364m to shareholders, meaning £225m will go to the Treasury. The bank has also pledged to distribute at least £800m a year to shareholders until 2023.

The central bank’s dividend ban last year meant scrapping a £968m shareholder payout, including £600m worth of dividends to the Treasury. The move was designed to give banks a larger cushion to weather the economic downturn of the Covid crisis.

NatWest confirmed on Friday that it was intending to pull out of the Republic of Ireland, with plans to wind down and sell assets from its Ulster Bank operations after an “extensive” review.

Rose said: “It has become clear Ulster Bank will not be able to generate sustainable long terms returns for our shareholders. As a result, we are to begin a phased withdrawal from the Republic of Ireland over the coming years, which will be undertaken with careful consideration of the impact on customers and our colleagues.”