NatWest Group is set to announce on Friday that it distributed a bonus pool of nearly £500 million for the year 2025, marking a significant milestone as the bank fully returns to private ownership after 17 years under state control. This disclosure will accompany the bank's annual results, revealing a bonus figure just over £490 million, which represents an approximate 10% increase compared to the previous year.
Alignment with Industry Trends
The rise in NatWest's bonus pool is broadly consistent with increases awarded by other major UK banks, including Barclays and Lloyds Banking Group. This move comes as NatWest's shares trade at levels not commonly seen in nearly two decades, reflecting improved market confidence and financial performance.
Historical Context and Recent Acquisitions
Earlier this week, NatWest confirmed its acquisition of Evelyn Partners, a wealth management firm, for £2.7 billion. This deal stands as the bank's largest corporate acquisition since its bailout in 2008, when it was known as Royal Bank of Scotland and received a £45.5 billion equity injection from taxpayers. At its peak, the bank was more than 80% state-owned, but it returned to full private sector ownership in May of last year, concluding a turbulent chapter in its history.
Scrutiny and Evolution of Bonus Policies
In the years immediately following the bailout, bonus decisions at RBS were intensely scrutinised by Westminster, leading to heated discussions between bank management and government shareholders. However, tensions have eased in recent years due to the gradual shift back to majority private ownership and a general reduction in overall bonus numbers. The 2025 bonus pool of close to £500 million reflects NatWest's improved financial trajectory, with performance targets having been upgraded as recently as October.
Comparison with Rivals
Unlike competitors such as Barclays and HSBC, NatWest no longer operates a large-scale investment bank, resulting in significantly smaller annual bonus pools compared to its rivals. For instance, Lloyds, which awarded bonuses of approximately £400 million last year, is also expected to release its annual report on Friday, detailing a revamped remuneration policy.
Both NatWest and Lloyds have declined to comment on these developments, maintaining a focus on their upcoming financial disclosures. This news underscores the ongoing transformation within the UK banking sector as institutions navigate post-bailout landscapes and adapt to evolving market conditions.
