Newsletter 7th November 2022

The government still own a 48% stake in NatWest. Is it because they're trying to ensure the bank pays its fair share of taxes?

NatWest CEO Defends Bank Tax

 The CEO of NatWest has defended the amount of tax banks pay in the UK, stating that they make a "fair contribution" despite being subject to an 8% levy on earnings over £25 million.

Former chancellor George Osborne instated this levy to keep the UK competitive; despite this, banks continued to make "a fair contribution" in the aftermath of government assistance during the financial crisis.

The government still holds a majority stake in NatWest, which was bailed out to the tune of £45.5 billion during the crisis. Consequently, banks remain a controversial topic in the UK, with many people arguing that they should be taxed more heavily to prevent another financial collapse.

Alison Rose, NatWest's CEO, has defended the bank's tax bill considering the market turmoil caused by the government's mini-budget.

Ms Rose said that the mortgage industry has been thrown into chaos by the budget and that NatWest has already lowered its rates in response. However, she added that the bank has also benefited from rising interest rates.

Ms Rose's comments come as the Resolution Foundation warned that more than five million homeowners could see their annual mortgage payments increase by an average of £5,100 between now and 2024.

Mortgage rates have been lowered, which has already been passed on to consumers, according to Ms Rose. However, NatWest has become the latest bank to benefit from rising interest rates, with higher borrowing costs lifting quarterly profits to £1.1 billion. Pre-tax operating profits for the three months ended on the 30th of September were up 11% from £976 million in the same period in 2021.

Despite economic insecurity and rising living costs, Ms Rose said that the banking sector is doing better than it did during the global crisis.