NatWest is giving its bankers bigger bonuses this year after the group, still majority-owned by taxpayers, bounced back to a £4bn profit in 2021 as the economy recovered from the coronavirus pandemic.
The lender said it had increased its bonus pool to £298m, a 44% increase on a year earlier.
Alison Rose, the chief executive of NatWest, said it was a “restrained bonus pool” and added that the bank was “very mindful of the challenges that our customers are facing with inflation and cost of living”.
She told BBC Radio 4’s Today programme: “We need to make sure we are rewarding fairly.”
Rose’s total pay for 2021 was £3.6m, up from £2.6m a year earlier.
It came as NatWest reported statutory pre-tax profits of £4bn, a return to profitability after a £351m loss a year earlier, as the bank benefited from the UK’s economic recovery from the pandemic.
The bonus pool for 2021 was 3% lower than the £307m for 2019, before the pandemic.
Rose added the bonus pool was reduced in 2020 to reflect the bank’s performance during the first year of Covid, when it was loss-making.
Rose said the lender was aware of the cost of living crisis being experienced by its customers, in the face of rising inflation, but said it was “not seeing any signs of strain at the moment” among households and businesses.
“For lots of customers and businesses actually, these are challenges that they haven’t faced for almost 10 years, so these are new challenges,” Rose said.
NatWest, which is still majority-owned by the UK government, returned £1.7bn to taxpayers in dividends and share buybacks in 2021.
The taxpayer stake in the bank formerly known as Royal Bank of Scotland has reduced to just under 51%, and is expected to move below 50% in the coming months.
Rose said it was “in the government’s hands” when ministers would opt to sell down the remaining stake.