NatWest Markets pays nearly £60m to handful of top traders

NatWest Markets paid out nearly £60m to a handful of top employees in its sales and trading unit, even as the division posted an annual loss in 2020.

The bank paid £58m to so-called material risk takers working in sales and trading functions, it revealed in accounts today, with 88 people across the unit falling into this category of top employees.

MRTs are senior employees whose actions can influence the risk profile of the overall bank. There were a further 51 people working in capital markets functions at NatWest, with the bank paying them £27.4m.

NatWest Markets posted a loss of £227m last year, on revenues of £1.1bn, compared to a loss of £25m in 2019 the bank revealed in its annual report on 19 February. The unit has been subject to deep cuts over the past year as it reshapes the business. Alison Rose, the bank’s chief executive, told journalists today that she was “pleased with the performance” of NatWest Markets and that the overhaul of the unit will make it “less volatile”, as well as consuming less capital and contributing to the overall bank.

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Material risk takers were included in Bank of England’s demands in March that UK lenders stop paying cash bonuses to their senior executives in the early stages of the Covid-19 pandemic. The regulator has since lifted these restrictions, but in a December letter said that banks should exercise a “high degree of caution and prudence” on bonus payments.

In February last year, NatWest Group unveiled plans to strip out around £20bn in unwanted assets from its investment bank in a bid to turnaround performance in the unit. It pushed ahead with 130 job cuts in April, even as rivals paused any redundancies in the early stages of the pandemic. NatWest Markets employed around 5,000 people at the end of 2019, but this number has shrunk to just 2,200 staff at the end of last year, its annual results show.

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NatWest has long been prudent on pay, with this year’s overall bonus pool shrinking by a third to £206m. The bank has limited cash bonuses to £2,000 since the financial crisis. However, there were 38 people earning over €1m at NatWest last year, up from 30 in 2019.

Meanwhile, MRTs working in sales and trading functions outside of the C-suite received £41m in fixed compensation last year, and £16.3m in bonuses. However, the majority of this was in deferred shares, with just £120,000 paid out in cash.

To contact the author of this story with feedback or news, email Paul Clarke

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