Latest news with #Thwaite
Yahoo
7 days ago
- Business
- Yahoo
UK banks urge policy support as confidence remains fragile
UK high street banks reported an increase in small and medium-sized enterprise (SME) lending volumes during oral evidence to the Treasury Select Committee on 20 May 2025. The hearing, chaired by Dame Meg Hillier MP, focused on SME access to finance in the context of post-Covid economic pressures, including the cost of living crisis, inflation and interest rate volatility. Senior executives from HSBC, Barclays, Lloyds Banking Group and NatWest acknowledged a significant improvement in SME borrowing levels in the first quarter of 2025 compared to 2024, but cautioned that confidence remains fragile and growth is emerging from a historically low base. Ian Stuart, CEO of HSBC UK, noted that lending to SMEs is highly sensitive to business confidence. 'This is a market that does really well when people are feeling confident about the economy and the future, and it stalls when it has not got that level of confidence,' he said. HSBC has seen a material uptick in lending compared to the same period last year and has launched a strategic shift in business banking, combining increased investment in local relationship managers with greater automation. Vim Maru, CEO of Barclays UK, reported a 35% year-on-year increase in SME lending in 2024, with further gains in Q1 2025. 'The confidence levels have clearly ebbed and flowed through that period, and we continue to see some challenges,' he said, adding that spending time with SMEs to understand their needs has been central to the bank's strategy. Charlie Nunn, CEO of Lloyds Banking Group, highlighted that SME sentiment remains above the long-term average despite recent tax increases and trade tariff uncertainty. 'Cashflows have continued to strengthen year on year. If we can get the confidence and the plan for growth, there is resilience in this sector,' Nunn said, citing a long-running business sentiment survey. NatWest CEO Paul Thwaite confirmed that the bank has also recorded significant growth in SME lending, particularly among start-ups. NatWest claims to bank around 20% of all UK start-ups and operates 12 accelerator hubs nationally to support early-stage businesses. 'SMEs are the lifeblood of the economy,' Thwaite said. 'We need SMEs to grow and borrow, and banks need to play their part.' Labour MP Lola McEvoy, who represents Darlington, questioned the witnesses about regional disparities in SME finance, particularly in the north-east of England. Thwaite and Nunn both supported the government's proposed industrial strategy, noting its potential to provide clarity on future growth sectors and stimulate local investment. Both also emphasised the importance of engaging with combined authorities, local mayors and regional universities. Responding to concerns about access to capital for microbusinesses, Thwaite said that while there is abundant supply in the market, including challenger banks and brokers, the demand side remains underdeveloped. 'We still think there is a lot that we can do as a country to encourage awareness and understanding of the ability to access finance,' he said. Barclays' Maru said the bank recently allocated a £22 billion fund for business lending and operates a nationwide network of 40 'Eagle Labs' to support SME scale-up activity. HSBC's Stuart added that personal guarantees remain a key barrier to lending uptake, though HSBC has removed guarantees on around two-thirds of its SME book. All four banks rejected the suggestion that they are unduly risk-averse. Both Barclays and HSBC cited loan approval rates of around 80%. The CEOs also dismissed the notion that large banks are losing ground to challenger lenders, with Thwaite asserting NatWest remains the UK's largest business lender. While McEvoy raised data suggesting only 5% of SMEs consider switching lenders if declined credit, the banks stressed their commitment to supporting borrowers. Lloyds' Nunn pointed to the group's equity financing arm, Lloyds Development Capital, as a differentiator in enabling scale-up capital beyond traditional loans. The hearing also revisited legacy issues around SME mis-selling and the Business Banking Resolution Service (BBRS). Dame Siobhain McDonagh raised concerns about the perceived independence of the BBRS, given its funding and governance links to seven banks, including Lloyds and Nunn and Paul Thwaite defended the BBRS's role and governance. Nunn said the BBRS had become less active over time and that new consumer duty regulations and conduct rules are now the main channels for customer redress. 'We have independent ways of operating,' he said, 'and that is a really important point going forward.' Thwaite acknowledged the emotional and financial toll on affected businesses. 'It is critical. I like to think the industry has learned the lessons of the financial crisis,' he said, adding that banks are willing to handle specific complaints bilaterally. While lending data shows positive movement, the CEOs were clear that SME borrowing appetite remains tempered by economic uncertainty. The regional investment gap, microbusiness access challenges, and trust in financial institutions were recurring themes during the session. "UK banks urge policy support as confidence remains fragile" was originally created and published by Leasing Life, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. 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Mint
7 days ago
- Business
- Mint
NatWest Gets Ready for Life After UK Government Ownership
Freed from the clutches of government ownership, NatWest Group Plc is getting ready to chart its own course for the first time in almost two decades. The UK has less than 1% remaining of its crisis-era holding in the lender and could sell out any day now. While the moment is mostly symbolic for Chief Executive Officer Paul Thwaite and Chairman Rick Haythornthwaite, getting the government off the shareholder register will be the final step in shedding NatWest's reputation as a beleaguered bank that was almost destroyed by an acquisition spree 17 years ago. The pair, who have steered the company as the government rapidly sold off its stake that was £9 billion in size roughly two years ago, are already building on the firm's shift from recovery to expansion. They've acquired the majority of J Sainsbury Plc's banking assets. They picked up a mortgage portfolio from Metro Bank Holdings Plc in a £2.5 billion deal last year. And, more recently, they reportedly showed interest in Banco Santander SA's UK business. In addition, they've crafted plans to go after a wider set of affluent Britons in the wealth management business. They're also seeking a major role in bankrolling ambitious infrastructure projects that Prime Minister Keir Starmer's Labour government is planning to boost the economy. 'From an acquisition perspective, if there's the ability to add scale, add capability – we'll look at it,' Thwaite told reporters on the sidelines of the company's annual shareholder meeting in April, while cautioning that any deals aren't likely to transform the bank's overall direction and that the firm will remain disciplined. 'Rick and I remain very ambitious for the business.' Thwaite said the bar for further acquisitions remains very high and won't take the bank into any new businesses or geographies. The Santander bid, for instance, would have only given the bank a greater presence in the UK consumer banking scene it already dominates. 'We're not looking to change the direction of the bank or anything like that,' he said. 'It's a brilliant bank, it has three great businesses, it has lots of potential to grow. In some ways, boring is good in banks.' In many ways, the British government rescued a very different bank than the NatWest of today. Back then, the group was known as Royal Bank of Scotland, with a £2.2 trillion balance sheet and nearly 200,000 staff around the world — the result of RBS buying NatWest around the turn of the millennium, before it swallowed ABN Amro's investment bank in 2007. The ABN Amro deal, which executives struck just months before the start of the financial crisis, was subsequently described as 'the one distinguishing feature in the catalogue of shame, in which all bankers sit at the moment' by RBS's then-deputy CEO Gordon Pell. In a series of emergency cash injections, Westminster became the majority shareholder in NatWest, ultimately controlling 84% as UK taxpayers shouldered the nearly £46 billion bailout bill. Without the rescue, the government feared contagion that could have destabilized the rest of the financial system. While fellow bailout recipient Lloyds Banking Group Plc regained its private status in 2017 and left the Treasury a windfall of £894 million, NatWest proved to be a different story as the high-street lender spent years struggling to improve its profitability. Even after the final sale, the government will be roughly £10 billion in the red on its support package for the bank, according to Bloomberg calculations. 'It was hard to know what the dimensions were of the crisis you were trying to fix,' Stephen Hester, who stepped in as chief executive of the lender in 2008, recalled in an interview. 'The financial world was coming apart at the seams.' During Hester's tenure the bank cut more than 39,000 jobs and exited more than 20 countries, while facing years of legal proceedings for its role in the Libor-rigging scandal. Under European state aid rules, it was required to sell its payments unit WorldPay, missing out on billions of pounds of value growth within a few years of the disposal. At the start, the political scrutiny was intense, he said. 'In the first six to 12 months of the crisis, there was a huge amount of partnership between politicians and me and the bank because we were all trying to deal with the crisis as best we could,' Hester said. 'As things calmed down, the differences between the political agenda and the rational business agenda started to increase.' During the 2010s, the restructuring continued under CEO Ross McEwan and Chairman Howard Davies. By 2023, which was Davies's final full year as chair, the bank booked a pretax profit of £6.2 billion – a testament to how far it had come since suffering losses of £41 billion in 2008. The majority of those earnings came from domestic retail and commercial banking, after the group dropped most of its investment banking operations. Now, the NatWest balance sheet is just £708 billion, with a headcount that's less than a third of the number during its heyday. Some of the retrenchment was in lockstep with other banks, even those that didn't receive bailouts, as the entire industry fell into line with a global crackdown on practices seen as too risky. Barclays Plc, for instance, escaped without a state rescue but still disposed of several 'non-core' units. Yet for NatWest in particular, it was clear the UK government was watching. Take bonuses: in 2011, then-Chancellor of the Exchequer George Osborne stressed that he expected the firm to rein in awards and 'should be a back-marker in the industry, instead of the front-runner it once was.' The bank duly cut its bonus pool. Hester waived a bonus in 2012 after a row in the House of Commons over his pay, and every post-crisis CEO until Thwaite has forfeited some element of their awards over the years. Just as the improving performance was taking the heat off the lender, NatWest got enmeshed in a political controversy, complicated further by the government's presence on the shareholder register. In 2023, wealth subsidiary Coutts's decision to drop right-wing politician Nigel Farage as a client kicked off a firestorm, eventually forcing then CEO Alison Rose — Thwaite's predecessor — to resign. Davies, for his part, came under criticism from politicians for backing Rose, whose departure came after she briefed a journalist on the matter. Today, he says, he would do nothing different. 'The board made what I thought were reasonable decisions and the regulators didn't contest that,' Davies said. 'It was unfortunate' that the state was still a controlling shareholder and 'it was difficult for them to say nothing. I hope they would not take the same interest in it now as they did then,' he added. Farage settled with NatWest in March. A month later, the bank's shares jumped to a 14-year-high after its results beat estimates in the first quarter, despite the headwinds the global economy faces. The government's selloff has accelerated in the past year, taking advantage as higher interest rates buoyed financial stocks. The sales, though, crystallized losses on the rescue, with NatWest shares only breaking above the roughly 500 pence-per-share initial cost of the bailout a few weeks ago. 'I know it's best to sell into a rising market but the sales have been much too speedy in recent years, in my view, and that's another taxpayer cost,' said Philip Hampton, who chaired the bank until 2015. 'On an individual note, I think Alison Rose was very badly treated, which confirms again how cheaply political government ownership can be.' With assistance from Joe Mayes, Harry Wilson and Jack Witzig. This article was generated from an automated news agency feed without modifications to text.
Powys County Times
20-05-2025
- Business
- Powys County Times
NatWest boss says AI is ‘addition' to human jobs rather than replacement
The head of NatWest has said he sees no 'direct link' between artificial intelligence and the loss of human jobs at the bank. Chief executive Paul Thwaite told MPs on Tuesday that he thinks AI can 'improve the productivity of the economy' and that NatWest is deploying the technology across the bank. NatWest is using generative AI to 'make colleagues more efficient', he said, citing jobs like software engineers and relationship managers. Scores of companies, mainly in the tech sector, have already announced rounds of job cuts which are thought to be linked to the growing use of AI. Microsoft said it would lay off about 6,000 workers earlier in May, at the same time as it invests heavily in AI and uses it more for jobs such as software development. A World Economic Forum survey showed earlier this year that 41% of employers intent to downsize their workforce as the technology automates tasks. Mr Thwaite, who employs more than 60,000 people at NatWest, said: 'We don't see a direct link between deploying technology and removal of jobs. 'What I would say is the profile of the workforce is changing a lot. 'We're now recruiting people who are specialists in AI, data scientists, digital experts, that's obviously a different profile of staff from which the bank was recruiting 15, 16 years ago. 'So really it's an addition to staff rather than a replacement.' Mr Thwaite was speaking to the cross-party Treasury Committee of MPs, along with bosses from Barclays, Lloyds and HSBC. Charlie Nunn, the chief executive of Lloyds, said AI could give customers 'more personalised advice' for banking services. He said this is currently always done with a 'human in the loop'. Mr Nunn was separately pressed on Lloyds' record over the car finance mis-selling scandal, which has so far seen the bank set aside more than £1.1 billion in case of a possible fallout. Mr told MPs: 'At this stage we don't have evidence of harm. 'That's not one of the things that's been focused on, or in fact that we've broken the regulation retrospectively. 'If those things were found to be true of course we'd then lean in fully to try to identify the customers that did experience harm as defined by the FCA (Financial Conduct Authority), and then support a remediation programme.' Lloyds is at the centre of a looming crisis facing the motor finance industry, with major lenders in the sector on the hook for potentially billions of pounds' worth of compensation for motor finance deals with hidden commission payments. The Court of Appeal in London ruled last October that it was unlawful for car dealers to receive commission on motor finance from lenders without a customer's informed consent. The court decision opened the door for a potential fresh wave of complaints from consumers who think they may have been mis-sold car finance in previous years. When it was put to Mr Nunn by MPs that constituents felt they had been 'duped' on car finance deals, he said: 'The specifics are in the individual cases.' He added: 'When we look at the individual cases… it's looking at that combination of factors that determines whether a customer actually got the right package or the right deal or whether there were harm. 'And as I said at this stage we haven't had evidence of harm although if it were identified of course we would lean into it.'
Western Telegraph
20-05-2025
- Business
- Western Telegraph
NatWest boss says AI is ‘addition' to human jobs rather than replacement
Chief executive Paul Thwaite told MPs on Tuesday that he thinks AI can 'improve the productivity of the economy' and that NatWest is deploying the technology across the bank. NatWest is using generative AI to 'make colleagues more efficient', he said, citing jobs like software engineers and relationship managers. Scores of companies, mainly in the tech sector, have already announced rounds of job cuts which are thought to be linked to the growing use of AI. We don't see a direct link between deploying technology and removal of jobs Paul Thwaite, NatWest Microsoft said it would lay off about 6,000 workers earlier in May, at the same time as it invests heavily in AI and uses it more for jobs such as software development. A World Economic Forum survey showed earlier this year that 41% of employers intent to downsize their workforce as the technology automates tasks. Mr Thwaite, who employs more than 60,000 people at NatWest, said: 'We don't see a direct link between deploying technology and removal of jobs. 'What I would say is the profile of the workforce is changing a lot. 'We're now recruiting people who are specialists in AI, data scientists, digital experts, that's obviously a different profile of staff from which the bank was recruiting 15, 16 years ago. 'So really it's an addition to staff rather than a replacement.' Mr Thwaite was speaking to the cross-party Treasury Committee of MPs, along with bosses from Barclays, Lloyds and HSBC. Charlie Nunn, the chief executive of Lloyds, said AI could give customers 'more personalised advice' for banking services. He said this is currently always done with a 'human in the loop'. Mr Nunn was separately pressed on Lloyds' record over the car finance mis-selling scandal, which has so far seen the bank set aside more than £1.1 billion in case of a possible fallout. Mr told MPs: 'At this stage we don't have evidence of harm. 'That's not one of the things that's been focused on, or in fact that we've broken the regulation retrospectively. 'If those things were found to be true of course we'd then lean in fully to try to identify the customers that did experience harm as defined by the FCA (Financial Conduct Authority), and then support a remediation programme.' Charlie Nunn, chief executive of Lloyds (House of Commons/UK Parliament/PA) Lloyds is at the centre of a looming crisis facing the motor finance industry, with major lenders in the sector on the hook for potentially billions of pounds' worth of compensation for motor finance deals with hidden commission payments. The Court of Appeal in London ruled last October that it was unlawful for car dealers to receive commission on motor finance from lenders without a customer's informed consent. The court decision opened the door for a potential fresh wave of complaints from consumers who think they may have been mis-sold car finance in previous years. When it was put to Mr Nunn by MPs that constituents felt they had been 'duped' on car finance deals, he said: 'The specifics are in the individual cases.' He added: 'When we look at the individual cases… it's looking at that combination of factors that determines whether a customer actually got the right package or the right deal or whether there were harm. 'And as I said at this stage we haven't had evidence of harm although if it were identified of course we would lean into it.'
Yahoo
20-05-2025
- Business
- Yahoo
NatWest boss says AI is ‘addition' to human jobs rather than replacement
The head of NatWest has said he sees no 'direct link' between artificial intelligence and the loss of human jobs at the bank. Chief executive Paul Thwaite told MPs on Tuesday that he thinks AI can 'improve the productivity of the economy' and that NatWest is deploying the technology across the bank. NatWest is using generative AI to 'make colleagues more efficient', he said, citing jobs like software engineers and relationship managers. Scores of companies, mainly in the tech sector, have already announced rounds of job cuts which are thought to be linked to the growing use of AI. Microsoft said it would lay off about 6,000 workers earlier in May, at the same time as it invests heavily in AI and uses it more for jobs such as software development. A World Economic Forum survey showed earlier this year that 41% of employers intent to downsize their workforce as the technology automates tasks. Mr Thwaite, who employs more than 60,000 people at NatWest, said: 'We don't see a direct link between deploying technology and removal of jobs. 'What I would say is the profile of the workforce is changing a lot. 'We're now recruiting people who are specialists in AI, data scientists, digital experts, that's obviously a different profile of staff from which the bank was recruiting 15, 16 years ago. 'So really it's an addition to staff rather than a replacement.' Mr Thwaite was speaking to the cross-party Treasury Committee of MPs, along with bosses from Barclays, Lloyds and HSBC. Charlie Nunn, the chief executive of Lloyds, said AI could give customers 'more personalised advice' for banking services. He said this is currently always done with a 'human in the loop'. Mr Nunn was separately pressed on Lloyds' record over the car finance mis-selling scandal, which has so far seen the bank set aside more than £1.1 billion in case of a possible fallout. Mr told MPs: 'At this stage we don't have evidence of harm. 'That's not one of the things that's been focused on, or in fact that we've broken the regulation retrospectively. 'If those things were found to be true of course we'd then lean in fully to try to identify the customers that did experience harm as defined by the FCA (Financial Conduct Authority), and then support a remediation programme.' Lloyds is at the centre of a looming crisis facing the motor finance industry, with major lenders in the sector on the hook for potentially billions of pounds' worth of compensation for motor finance deals with hidden commission payments. The Court of Appeal in London ruled last October that it was unlawful for car dealers to receive commission on motor finance from lenders without a customer's informed consent. The court decision opened the door for a potential fresh wave of complaints from consumers who think they may have been mis-sold car finance in previous years. When it was put to Mr Nunn by MPs that constituents felt they had been 'duped' on car finance deals, he said: 'The specifics are in the individual cases.' He added: 'When we look at the individual cases… it's looking at that combination of factors that determines whether a customer actually got the right package or the right deal or whether there were harm. 'And as I said at this stage we haven't had evidence of harm although if it were identified of course we would lean into it.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
