From Yahoo Finance: 2025-05-31 03:00:00

In October 2008, the UK government bailed out Royal Bank of Scotland (RBS) with a £45 billion rescue plan. The financial system was on the brink of collapse, prompting the government to take majority ownership of RBS. This move was essential to prevent a financial meltdown and restore stability to the banking sector.

RBS’s near-collapse was triggered by a series of acquisitions under former CEO Fred Goodwin that fueled rapid international expansion. Goodwin’s lavish spending, big pension package, and risky deals, including the purchase of ABN Amro for £49 billion, led to the bank’s downfall. The financial crisis of 2008 further exacerbated RBS’s troubles, resulting in the need for a government bailout.

The government’s final sale of its shares in RBS, known as NatWest Group, marked the end of a 17-year journey to restore the bank to private hands. Despite the £10.5 billion loss to taxpayers, the sale signified the completion of a tumultuous chapter in RBS’s history. The bank’s restructuring efforts under new leadership aimed to rebuild its reputation and financial stability post-bailout. RBS boss Fred Goodwin faced backlash in 2008 due to lavish spending and a big pension package. Stephen Hester cut 39,000 jobs and £1tn from the bank’s balance sheet. Hester faced controversies over pay and lost out on bonuses. RBS was fined £390m for Libor rigging during Hester’s tenure.

Ross McEwan replaced Hester, tasked with further cuts. George Osborne scrapped executive bonuses at RBS until 2022. RBS settled a $5.5bn US regulators lawsuit for toxic mortgages. The bank began privatisation in 2015, focusing on stability and compliance.

NatWest faced scandals, fines, and branch sell-offs. In 2018, RBS reported its first annual profit, paying dividends to the UK government. Alison Rose took over as CEO in 2019, leading the bank through strong finances and buybacks. Rose championed diversity and cultural change, rebranding RBS to NatWest.

Alison Rose’s leadership was praised, earning her a damehood in 2023. Rose’s initiatives restored NatWest to stability and profitability. Controversy arose when Coutts planned to shut Nigel Farage’s accounts, leading to backlash from the MP and Reform UK leader. In 2008, RBS boss Fred Goodwin sparked public backlash for lavish spending and a big pension package. Farage uncovered internal documents showing the bank’s concerns over his political views, leading to a campaign against unfair discrimination. NatWest CEO Alison Rose stepped down after discussing Farage’s case with a BBC journalist.

An external law firm found no evidence supporting Farage’s allegations of NatWest debanking customers based on political views. Paul Thwaite replaced Rose as NatWest’s CEO. The government recouped only £35bn of the £45bn spent rescuing the lender, resulting in a £10.5bn loss for taxpayers. Thwaite expressed gratitude to the public for keeping the lender afloat.

Thwaite aims for a more prudent approach as the bank returns to private ownership, avoiding past mistakes. The focus is on driving better returns for shareholders and being thoughtful about risk versus reward. The new leadership, including Rick Haythornthwaite, promises a more stable future for the lender.



Read more at Yahoo Finance: how the NatWest ‘soap opera’ unfolded