NatWest hands UK taxpayers a £2bn windfall
NATWEST has returned more than £2.2bn to the taxpayer so far this year after announcing a bumper dividend.
The high street lender, formerly known as royal Bank of Scotland, is still 49pc- owned by the Government following its £46bn bailout during the financial crisis.
But the treasury is now set to scrape a little more money back, after a half-year payout of 3.5p per share plus a special dividend of 16.8p a share.
When the taxpayer has taken its chunk of the £2.1bn payout, plus £1.2bn from a directed share buy-back the bank completed in March, it will have pocketed around £2.2bn.
The dividends come despite worries the economy is headed for a bleak few months.
NatWest – and Lloyds Bank this week – announced strong first- half results. NatWest profit rose 13pc to £2.6bn. Shares leapt 8.1pc, or 18.6p, to 248.6p, as the bonus pool increased from £ 142m to £195m. Performance has been boosted by higher interest rates as it can charge borrowers higher rates without lifting the rates on savings accounts by as much.
Chief executive Alison rose said: ‘What we’re seeing is a squeeze on disposable income – we’re not seeing a credit event, we’re seeing a potentially lower growth event.’
In a sign that NatWest was not expecting customers to start struggling with mortgage and other loans, it released £46m of the money it had set aside to cover souring loans.
Rose added: ‘What we are seeing, in our debit and credit card spending, is strong spending in areas like entertainment and hospitality and travel. We are seeing spending on critical items like utilities and fuel up by 20-30pc but not seeing an erosion of cash balances.’
So far, the Government has recovered around £15bn of the £46bn it ploughed in.