NatWest H1 2024 profits: Positive Money response

London, 26 July 2024 - Positive Money responds to NatWest’s announcement this morning that its pre-tax profits for the first half of 2024 were £3bn, beating market expectations.

Simon Youel, head of policy and advocacy at Positive Money, said: 

“Despite a small dip from last year, today’s results still outstrips what NatWest was making before higher interest rates hit.

“An era of higher rates has not only boosted NatWest’s profits by forcing households and businesses to spend more servicing debts, but it’s also given a huge windfall from the interest paid on risk-free central bank reserves, a subsidy ultimately paid for by the public purse. 

“The new government is already facing accusations that it’s giving the finance sector too much influence over public policymaking. A windfall tax on excess bank profits, or a change to the way interest on bank reserves are paid for by the public, would swiftly put such accusations to bed.”

Notes:

• Today’s announcement from NatWest can be found here: https://www.natwestgroup.com/news-and-insights/latest-stories/financial-reporting/2024/jul/H1-2024-NatWest-Group-Results.html  

• NatWest’s pre-tax H1 profits for 2018 (before the pandemic, cost of living crisis or rate rises) were £1.8 billion: https://www.natwestgroup.com/news-and-insights/feature-content/our-updates/2011-2020/2018-h1-results.html 

• NatWest Group has closed more branches than any other banking group: https://www.which.co.uk/money/banking/switching-your-bank/bank-branch-closures-is-your-local-bank-closing-ayYyu4i9RdHy 

• Labour’s relationships with the City have been covered extensively here: https://www.opendemocracy.net/en/dark-money-investigations/lovebombed-by-lobbyists-how-starmer-labour-became-the-party-of-big-business/ 

• Calls for a windfall tax on banks have been echoed by MPs, including Angela Eagle, John McDonnell, Clive Lewis, Diane Abbott and Richard Burgon

• Polling commissioned by Positive Money in September 2023 found the majority of the public supports a windfall tax on banks: https://positivemoney.org/2023/09/uk-public-support-windfall-tax-on-banks-polling-shows/ 

• The New Economics Foundation has proposed reducing the interest paid on banks’ reserves at the Bank of England: https://neweconomics.org/2022/06/between-a-rock-and-a-hard-place Such proposals have been endorsed by the likes of the FT’s economics editor, Chris Giles: https://www.ft.com/content/2fbe1549-33d4-472a-9cc0-f7791459d3a9 

About:

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of supporters. Find out more: positivemoney.org