NatWest profits soar by 36% as full privatisation looms

TruthLens AI Suggested Headline:

"NatWest Reports 36% Profit Increase Amid Government Stake Reduction"

NatWest profits soar by 36% as full privatisation looms analysis cover image The Guardian 7.3
Image Source: https://i.guim.co.uk/img/media/7474204aa40d947385919e2cc814a9cbf99f75b8/1031_725_3578_2147/master/3578.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=12c20c95476a6e7d384dd86c838da0cf
Original Article Source: https://www.theguardian.com/business/2025/may/02/natwest-profits-soar-full-privatisation-looms
View Raw Article Source (External Link)
Raw Article Publish Date:
AI Analysis Average Score: 7.3
These scores (0-10 scale) are generated by Truthlens AI's analysis, assessing the article's objectivity, accuracy, and transparency. Higher scores indicate better alignment with journalistic standards. Hover over chart points for metric details.

TruthLens AI Summary

NatWest has announced a remarkable 36% increase in profits for the first quarter of the year, with operating profit before tax rising to £1.8 billion, up from £1.3 billion during the same period last year. This impressive performance substantially surpassed analyst expectations, beating forecasts by £200 million. The positive financial results come as the UK government has reduced its stake in the bank to 1.98%, signaling a path towards full privatization after 17 years of partial state ownership. The government had previously owned approximately 84% of NatWest, following its nationalization during the 2008 financial crisis, which required a bailout of nearly £46 billion. Chief Executive Paul Thwaite expressed optimism about the bank's trajectory, indicating that the strong performance positions NatWest to achieve the upper end of its guidance on income and shareholder returns for the year ahead.

The government's divestment has been rapid, with its shareholding plummeting from 38% at the end of 2023 to just under 10% by December, primarily through a combination of direct buybacks and a swift sell-off. The chair of NatWest, Rick Haythornthwaite, acknowledged the support of UK taxpayers during the bank's recovery, assuring shareholders that the management has addressed past issues and will maintain a cautious approach to risk. In contrast, other banks such as Standard Chartered and Lloyds have reported varying fortunes in their recent earnings, with Standard Chartered's profits rising by 10% but warning of potential challenges from US tariffs. Meanwhile, Lloyds experienced a 7% decline in profits due to increased costs and provisions for bad debts, reflecting the broader economic uncertainties facing the banking sector. Overall, NatWest’s strong quarterly results reflect a significant turnaround for the bank as it moves closer to complete privatization, while also highlighting the contrasting performance of other major banks in the UK.

TruthLens AI Analysis

The report on NatWest's significant profit increase highlights a period of financial recovery for the bank, which is transitioning back to full private ownership after government intervention during the 2008 financial crisis. As the government’s stake diminishes to less than 2%, this suggests a positive outlook for the bank's future, aiming to rebuild trust with shareholders and the public.

Government Exit Strategy

The government's gradual reduction of its stake in NatWest reflects a broader strategy to restore private ownership. By highlighting the bank's strong profit figures, the report aims to reassure taxpayers and investors that the bank has moved past its troubled history. It emphasizes that the past issues have been addressed, which serves to bolster confidence in the bank’s management.

Public Sentiment and Transparency

The article conveys a positive sentiment towards NatWest's recovery, likely intending to create a favorable public perception. By focusing on profit growth and the government’s reduced involvement, the piece aims to instill a sense of optimism among potential investors and stakeholders. However, there might be an underlying intention to downplay any ongoing risks or challenges associated with the bank’s past, which could lead to a perception of selective transparency.

Potential Omissions and Risks

While the news emphasizes positive financial results, it does not delve deeply into potential risks or challenges that NatWest might still face, such as economic uncertainty or regulatory pressures. This omission could suggest an attempt to present an overly optimistic view of the bank’s situation, which may not fully represent the complexities involved in its recovery.

Comparative Context

When compared to other financial institutions like Standard Chartered, which also reported strong profits but warned of external pressures like trade tariffs, the article may be positioning NatWest as a more stable investment option. This comparative framing could be a strategic choice to attract interest from investors who are wary of geopolitical risks affecting other banks.

Impact on Markets and Investment Sentiment

Positive news regarding NatWest's profitability could have a ripple effect on stock markets, particularly in relation to banking stocks. Investors may view this as a signal of recovery within the broader banking sector, potentially driving up share prices and encouraging investment in related financial institutions.

Broader Economic Implications

The report may resonate with communities who have a stake in the banking sector, particularly those who were affected by the financial crisis. By emphasizing recovery and profit, the article could appeal to individuals and groups advocating for economic stability and growth. However, it is essential to recognize the complexities of the financial landscape and the potential for unexpected downturns.

Use of AI in Reporting

There’s a possibility that AI tools were utilized in crafting this article, particularly in terms of data analysis and reporting structure. The focus on financial figures and corporate statements suggests an analytical approach that AI could facilitate. AI might have influenced the selection of positive narratives while downplaying adverse factors, which aligns with the intention to present an optimistic outlook.

In summary, the article presents a largely positive narrative about NatWest's recovery and impending full privatization. However, it may be selectively omitting certain risks and challenges that the bank still faces, which could affect its long-term stability and public perception.

Unanalyzed Article Content

Source URL: https://www.theguardian.com/business/2025/may/02/natwest-profits-soar-full-privatisation-looms

NatWest has reported a 36% increase in profits in the first three months of this year as the government reduced its stake in the bank to less than 2%, paving a return to fully private ownership after 17 years.

The bank reported operating profit before tax of £1.8bn, up from £1.3bn in the same period last year, beating analyst consensus forecasts by £200m.

Paul Thwaite, the NatWest chief executive, said that the strong performance meant the bank expected to hit the upper end of its guidance on income and shareholder returns this year.

The strong results come as the government moved to reduce its stake in NatWest to 1.98% on Thursday.

Last year the government shareholding fell by almost three-quarters, from 38% at the end of 2023 to just under 10% in December, through a combination of two direct buybacks by NatWest and a rapid sell-off.

The Treasury spent almost £46bn to bail out NatWest, then known as Royal Bank of Scotland, at the height of the financial crisis in 2008. The resulting nationalisation left taxpayers owning about 84% of the lender.

Last month, Rick Haythornthwaite, the chair of NatWest,thanked UK taxpayers for the bank’s bailout, assuring shareholders that bosses had “fixed the issues of the past” and would not “open up floodgates of risk” despite government pressure.

Separately,Standard Charteredalso reported a strong first quarter, with profits up 10% to $2.2bn (£1.65bn). However, the London-based bank warned of the potential impact of US tariffs as it reported a credit impairment charge of $219m in the period, up 24% year on year, as signs of trade tension affected credit quality.

“We delivered a strong performance in the first quarter of 2025,” said Bill Winters, the chief executive of the bank. “The subsequent imposition of trade tariffs has increased global economic and geopolitical complexity, and we remain watchful of the external environment.

Sign up toBusiness Today

Get set for the working day – we'll point you to all the business news and analysis you need every morning

after newsletter promotion

On Thursday, Lloydsrevealed a 7% slide in first-quarter profits to £1.5bn, mainly because of higher costs and impairment charges as it set aside £309m to account for possible bad debts amid the worsening global economic situation. That figure included a £35m net charge to prepare for the possible impact from Donald Trump’s tariffs.

Earlier in the week, HSBCreported a 25% fall in first-quarter profits, mainly owing to the same period last year benefiting from the proceeds of the sale of its banking business in Canada and its entire division in Argentina. The bank alsowarned of the impact of tariffs, reporting a $200m rise in expected credit losses to $900m in the first quarter.

Back to Home
Source: The Guardian