What the NatWest chief hopes to learn from his customers

Times

22-06-2025

Surrounded by about £10 million worth of high-grade metal stored in a warehouse on the outskirts of Leighton Buzzard, Paul Thwaite, the chief executive of NatWest, is a world away from London's Square Mile financial district.
The boss of the FTSE 100 lender is visiting Dynamic Metals, a family-owned company in Bedfordshsire that supplies customers in defence, aerospace and Formula One and is one of the 1.5 million firms served by Britain's biggest business bank.
Over the whine of industrial bandsaws, Alex Bailey, Dynamic's operations director, gives Thwaite, 53, a tour of the site, which has been extended using financing supplied by NatWest and is partly powered by roof-mounted solar panels funded by the bank's asset finance business.
Trips like these are more than just a chance for Thwaite to see the lender's finance in action, however. They also give him a glimpse of business sentiment on the ground.
Two hours earlier he attended a roundtable at the bank's Milton Keynes branch with 14 of its business customers, ranging from a professional services software company and IT security firm to a pipe coupling manufacturer and baby clothes maker. The overwhelming message from them was that despite all the talk from the government about prioritising economic growth, very little seemed to have changed in practice, and that red tape was stifling.
'I'm going to have to have a compliance department,' Seth Woodmansterne, the managing director of a greetings card supplier, told Thwaite, to laughter from the others. 'We're talking about greeting cards!'
For Thwaite, who tries to meet customers at least every week, events like these are 'very valuable' and are a 'much better way of getting insight' than the reams of reports from consultancies that he reads. 'Hearing it direct is better than through others,' he told The Times in an interview afterwards.
It's typical of the down-to-earth Liverpudlian, who previously ran the NatWest division that looks after its business customers and was suddenly thrust into the top job two years ago after Dame Alison Rose was pushed out by the previous government over the Nigel Farage account closure scandal. Ministers were able to intervene because the state at the time still owned 39 per cent of NatWest, a stake that was a legacy of the bank's £45.5 billion taxpayer bailout during the 2008 financial crisis.
• Pay boost for NatWest chief from shareholders
In a watershed moment for the lender, however, the government finally sold its remaining shares in NatWest last month, returning it to full private ownership after years of painful restructuring.
The state's exit, which cemented a £10.5 billion loss for taxpayers, is 'a new chapter' for the group and its employees, thousands of whom, like Thwaite, were working at the lender during the bailout. Now that NatWest is out of the government's grasp, there is speculation in the City about what Thwaite does next.
He has already put growth firmly on the agenda, having last year acquired both a £2.5 billion portfolio of residential mortgages from Metro Bank and most of Sainsbury's banking operations. This has spurred speculation in the City that further deals may be in the offing.
It emerged this year that NatWest had made an unsuccessful approach for Santander's UK business. Last week Benjamin Toms, an analyst at RBC Capital Markets, a stockbroker, also tipped NatWest as the most logical suitor for TSB.
Sabadell, the Spanish owner of TSB, has confirmed that it had 'received preliminary non-binding expressions of interest' in its British high street business, one of which is believed to have come from Santander.
Toms reckoned TSB could be worth £2.6 billion, which NatWest could pay without needing to raise capital, and that buying it would boost NatWest's market share in UK mortgages 'where the bank is underpenetrated' by about two percentage points.
Yet Thwaite, who would not comment specifically on TSB, signalled that NatWest was not interested in a bid, insisting there was a 'very high bar' for any dealmaking 'financially and operationally and culturally' and that management were confident in their ability to grow the business organically.
'My responsibility to the company and the shareholders is to do things that make compelling sense for shareholders,' he said. 'Adding a couple of percentage points to market share is not an existential issue.'
Thwaite has spent his entire career in banking. After studying management science and chemistry at the University of Manchester, he joined the Santander graduate scheme before quickly switching to NatWest in 1997. He has stayed ever since, rising through the ranks in a variety of roles before taking charge during the reputational crisis caused by the Farage debacle in July 2023. The chaotic departure of Rose was announced in the middle of the night and Thwaite received a call late in the evening from Sir Howard Davies, NatWest's then chairman, asking him to step up and become chief executive.
'It's a crucible moment because you suddenly find yourself in a position which you maybe hadn't anticipated two days before.'
Even so, Thwaite said he 'wasn't fazed by it' and 'jumped straight in'.
Since then, as well as having struck the Sainsbury's and Metro deals, he is at the forefront of industry lobbying efforts aimed at encouraging the government to scrap the ring-fencing regime, a central plank of Britain's reforms to make banks safer following the 2008 crisis by forcing them to legally separate their retail divisions from riskier operations.
• Banks' ring-fencing rules under scrutiny by City watchdog
The industry claims the rules are inefficient and have been supplanted by other regulatory changes, although critics would argue that axing the regime will make banks less safe.
Thwaite insisted that 'NatWest will not forget the lessons of the financial crisis' and that he is simply posing the question, 'is it the right time to review' the rules?
The government is likely to be receptive to the idea. Rachel Reeves, the chancellor, has put deregulation across industries at the centre of her drive to boost growth and is under pressure to show progress, with the latest official figures showing the UK economy contracted by a bigger-than-expected 0.3 per cent in April.
The small businesses at the roundtable hosted by NatWest in Milton Keynes certainly felt they were getting little help from either central or local government, with Woodmansterne, the greetings cards boss, telling Thwaite 'I have no engagement whatsoever, despite trying, from MPs or council'.
The NatWest boss said that 'there is no doubt from what I see in my interactions [with government] that they are determined to find a way to grow' and that 'you could argue it's still relatively early days'.
'What you've heard from the businesses today is they want, people want, to see the tangible benefits. I think we're approaching the moment of truth.'
The boss of NatWest has retreated from the 'purpose-led' strategy of his predecessor that came under attack during the scandal over its decision to close the Coutts account of Nigel Farage.
NatWest, which owns the Coutts private bank, became embroiled in the culture wars two years ago when Farage, who leads Reform UK, obtained Coutts internal documents about its decision. These showed that its reputational risk committee believed his public views 'were at odds with our position as an inclusive organisation'.
This stoked a row over freedom of speech and the affair ultimately cost Dame Alison Rose her job as NatWest chief executive, with Paul Thwaite promoted to replace her. It also led to close scrutiny of Rose's interest in diversity and inclusivity in business, which she had championed.
Since then, there has been a shift in stance at the group. In the last annual report published under Rose there were 262 instances of the word 'purpose'. This compares with 125 in the most recent report under Thwaite, where there was no mention at all of the lender being 'purpose-led'.
In an interview with The Times, Thwaite, who said he abhors corporate jargon, asked: 'Could you name the purpose?'
He said the strategy now was 'about what we're doing with our customers, not what the bank's doing about particular issues' such as the energy transition and social mobility.
'I think a lot of the communication about the bank, both external and internal, talked to those topics, and it could have drawn the link more clearly between how those topics are in service of our customers.'
However, he insisted that NatWest had not pulled back from environmental, social and governance (ESG) policies, even though there has been a broader shift away from these areas in the wider corporate world recently.
'We're still one of the biggest banks for sustainable finance. We have brilliant ESG teams, we're following our customers.'