NatWest paid $508k bonuses this year, made six more millionaires
If you're a banker or trader working at NatWest, your work satisfaction is probably growing by the day. The government, famously not a fan of big banking bonuses, is pulling further out of your employer, and your own bonus has gone up quite healthily over the last year, too.
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Average bonuses for “investment banking” material risk takers (MRTs) – a regulatory term that includes people with critical functions and/or earning a certain high sum of money – at NatWest were £404k per head in 2024. That’s pretty good, and a 17% increase on the £344k per head it paid in 2023.
It’s important to note that NatWest changed the style of its MRT reporting over the last two years. While it broke out “investment banking” MRTs in its 2024 report, we’ve used MRTs within its investment bank, NatWest markets, as a proxy for previous years. Typically, in MRT-related disclosures, “investment banking” also refers to sales & trading roles.
Much higher bonuses followed only slightly higher revenues. Within the bank’s trading income specifically, it noted that foreign exchange trading income increased by 15% over 2023, and interest rate trading income increased by 16%. Trading income as a whole, however, only increased by 4%.
Who’s to blame for the disparity? Maybe the credit traders. NatWest's credit trading registered a £163m loss in 2024. It also lost £72m from credit trading in 2023; the gap has therefore widened. It posted a £17m profit for credit trading in 2022.
Also interesting to note is that someone at NatWest took a pretty hefty pay cut (or has left the firm). The chart below shows the distribution of MRTs who earned over €1m (£830k). The number is down generally, with the top pay packet of over €4m (£3.3m) now being "just" between €3.5m and €4m. The total number of people earning over €1m went up as a whole, from 75 individuals to 81.
Unlike past years, HM’s Treasury probably wasn’t involved in the bonus decisions. The bank announced its agreement to buy another £1bn of its shares from the government on Monday, taking the latter’s stake in the firm from 14% to 11%. The treasury owned 85% of NatWest at its peak in 2009, due to its acquisition of Royal Bank of Scotland, which is now a NatWest subsidiary.
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