The Chairman of NatWest has thanked British taxpayers for bailing out the bank during the 2008 financial crisis, as it returns into private ownership after 17 years.
Rick Haythornthwaite, who succeeded Sir Howard Davies as chairman in April last year, expressed “gratitude to the taxpayer” for rescuing the bank, adding that the company had not forgotten “the lessons of the past” even as it pushes for changes to regulations that were introduced after the financial crisis.
Mr Haythornthwaite said the bank was in a reflective mood.
“It’s about a desire to express gratitude to the taxpayer. They not just rescued this bank, they protected millions of savers, of businesses, of homeowners.
“From the bank’s standpoint, it gave us the opportunity to completely restructure into a much safer and stronger bank.”
He spoke to Sky News as the government completed the sale of its remaining stake in the bank, formerly known as RBS, 17 years after a £46bn taxpayer-funded bailout that left the state with an 83% stake in the bank.
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The government began unwinding its stake in 2021 and completed the sale today, posting a final loss of £10.5 billion, and closing the door on one of the most turbulent periods in British economic history. It was also one of the most controversial periods.
The bank bailouts, orchestrated by Alistair Darling and Gordon Brown, attracted public anger and scrutiny of the excessive risk-taking that took place in the City.
A swathe of new regulations were implemented following the crisis, including new rules that forced banks to ring-fence their core retail banking arms from their investment arms, as well as a cap on bonuses.
While at the time the changes were viewed as necessary, Mr Haythornthwaite said the regulatory “pendulum may have swung too far.”
He said Britain had high-quality regulation, but there was scope to eliminate duplication in some areas. He said the current regime was compounding costs and inhibiting growth.
“The regulator stepped in very necessarily 17 years ago and raised the standards it expects of banks, of their leaders, of people working in those places. It made demands of the culture and demands of its service to customers. All that is very right,” he said.
“Inevitably, the pendulum can swing slightly too far. One may question whether it’s swung slightly too far, but I use the word ‘slightly’.”
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The Chancellor is receptive to his arguments. In her search for economic growth, Rachel Reeves is eyeing up the City.
In a Mansion House speech last year, she said that some of those post-2009 reforms had “gone too far.”
The bonus cap, first implemented by the EU, has already been lifted, and major banks, including NatWest, are now calling for an end to ring-fencing too. The Chancellor has said she is “open-minded” about the idea.
Some may be more nervous about that idea, less than two decades after the biggest bank bailout in history, but Mr Haythornthwaite said: “We’re not going to forget the lessons of the past,” adding: “This is not about triggering a race to the bottom.
“It’s very clear to me that this is a very different place. There’s a focus on the ethics of running a bank, of really focusing on customers,” he said.
“This is not a place where we are looking for quick wins to serve the few.”
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