NatWest is paying a £1.7 billion dividend to the government as it signalled a return to health under chief executive Alison Rose.
Last year it made a loss of £753 million as the pandemic bit and it was expected to take losses to support consumers and small businesses.
Today it said profits hit £2.9 billion in 2021, aided by the write-back of £1.3 billion of provisions it had made for bad loans.
NatWest is paying £3.8 billion in dividends overall and announced a £750 million share buyback.
NatWest, like rival Lloyds, is a good proxy for the UK economy, so its return to form is largely a function of the rebound from Covid.
The profits are, said Rose: “A sign of how well our customers are performing, of how resilient and entrepreneurial our customers are”.
The statement said: “We are acutely aware of the challenges that many people, families and businesses continue to face up and down the country and are working alongside our customers to provide the support they need - whether that is managing their money better, saving for a house or retirement or starting or growing a new business - as well as playing a leading role in the transition to net zero.”
There will be £300 million in bonuses to bankers, an amount Rose says is not over the top. She told the Standard: “I have people who come and join us who could be earning considerably more elsewhere.”
NatWest is the lowest payer of bonuses across the market, she said.
In December the bank was fined £264 million for money laundering failures after it was found to have taken black bin liners stuffed full of cash from a jeweller in Bradford.
NatWest, then called Royal Bank of Scotland, was bailed out in 2008 to the tune of about £50 billion.
That was at 500p a share. The stock was today down 7p at 232p.
The sluggishness of the share price remains a disappointment to the City.
Ian Gordon at Investec said the results today were worse than expected. He is advising clients to buy shares in Barclays and Virgin Money rather than NatWest.
The huge demand for mortgages is boosting demand at all banks, though there is regular speculation that the housing market must have peaked.
Rising interest rates should lead to wider profit margins for lenders.
