Alison Rose

This is a substantial increase from the loss of £351 million in 2020. Across the whole banking group, the operating profit reached £4.3bn.

The bank, which owns the Royal Bank of Scotland, also announced an impairment release of £1.3bn, compared to a charge of £3.2bn in 2020.

NatWest also revealed that net lending was up by 2.6% in the year, rising to £7.8bn, with a further 4% reduction in costs with the final figure coming in at £256m.

The bank has announced £3.8bn of distributions for the year, with £1.2bn to be handed out in dividends at 7.5p per share.

At the same time, a £298m bonus pool has been allocated, with is 3% lower than that declared in 2019, but the figure is 44% higher than the bonus pool announced in 2020.

As part of its full-year results, NatWest also revealed new financial targets, including a new income target of above £11bn in 2022, continued strong cost reduction of 3% in both 2022 and 2023 and plans to reiterate its CET1 ratio of 13% -14% by 2023, and -14% by the end of this year.

Commenting on the results, Alison Rose, chief executive of NatWest Group, said: “NatWest Group delivered a strong performance in 2021 as we returned to profitability, made progress against our strategy and distributed more than £3.8bn of capital to our shareholders, including £1.7bn to the taxpayer.

“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.

“As our economy recovers and the trend towards digital services accelerates, we are investing to deliver long term value in the bank and drive sustainable growth. We will do this by building closer and deeper relationships with our customers and by supporting their evolving needs and expectations at every stage of their lives.”

Zoe Gillespie, investment manager at Brewin Dolphin, added: “NatWest has beaten expectations again and looks set to continue on its positive trajectory. The net impairment release of nearly £1.3 billion, bumper profits, and strong capital reserves point to a bank in good health.

“The increased dividend and share buyback programme suggest NatWest’s management team are optimistic about the year ahead, while rising interest rates should only benefit its core business. NatWest is now much more attractive as an investment prospect, notwithstanding the likelihood of the government winding down its substantial stake in the bank.”