NatWest Group is finalising plans to pay out close to £450m in bonuses for last year as it prepares for a return to full private ownership nearly 17 years after its bailout.

Sky News has learnt that the bank’s remuneration committee is close to signing off the bonus pool ahead of its annual results announcement later this month.

The figure of roughly £450m will be about 25% higher than last year’s bonus pot of £356m, reflecting NatWest’s sharply improved performance in 2024, according to City sources.

Shares in the bank, which at one point was more than 80%-owned by British taxpayers, have nearly doubled over the last 12 months.

The Treasury has been rapidly reducing its stake in NatWest, with it now standing at just under 8%.

This weekend, Sky News can also reveal that the state will cease to become the company’s single-biggest shareholder within a matter of weeks, based on the current pace of the government’s trading plan, which drip-feeds stock into the market.

BlackRock, the world’s largest asset manager, holds a stake in NatWest of roughly 6%, meaning it could replace the Treasury as NatWest’s biggest investor as early as this month.

That would represent another significant milestone for NatWest’s board, chaired by Rick Haythornthwaite.

In October, the bank raised its profit outlook after posting a 26% rise in third-quarter income.

After its shares closed at 433.1p on Friday afternoon, it now has a market capitalisation of close to £35bn.

Last year, Sky News revealed that NatWest was planning to hand its chief executive a potential multimillion pound pay boost as it returns to full private ownership.

Lena Wilson, the chair of the bank’s remuneration committee has been consulting leading institutional shareholders about an overhaul of its boardroom pay policy, with the proposals to be put to a vote at its spring AGM.

Under the plans, Paul Thwaite, who took over as the bank’s interim chief executive in July 2023 before being handed the role on a permanent basis in February, would be in line for an increase in his maximum annual bonus from 100pc of his base salary to 150%.

NatWest also intends to replace its restricted share plan (RSP) for Mr Thwaite, which awarded him stock worth a maximum of 150% of his salary, with a performance share plan (PSP) which could pay him up to three times his basic pay each year.

Assuming his salary of just under £1.2m remains unchanged, that would mean him being in line for a maximum reward package – excluding pension contributions and other items – of about £6.6m, up from roughly £4.2m today.

The prospective increase would bring Mr Thwaite’s compensation more closely into line with peers including Charlie Nunn at Lloyds Banking Group and CS Venkatakrishnan at Barclays – who himself is expected to see his annual pay capped at just over £14m under a new policy.

Mr Thwaite replaced Dame Alison Rose after she was forced to step down over the debanking row involving Nigel Farage, the Reform Party leader.

Leading City investors who have been part of the consultation process are said to be overwhelmingly supportive of the pay overhaul.

During its previous incarnation as Royal Bank of Scotland, the bank encountered annual controversy over its remuneration – for its chief executives and the wider workforce.

In the immediate aftermath of its £45.5bn rescue by taxpayers during the financial crisis of 2008, the pension package of Fred Goodwin, RBS’s former chief, and bonuses awarded to his successor, Stephen Hester, became political headaches for the governments of Gordon Brown and David Cameron.

In recent years, however, such conflagrations have been defused by a combination of pay restraint and improved performance.

Even after the recent recovery in its valuation, taxpayers will see a loss running to billions of pounds from NatWest’s emergency bailout.

A NatWest Group spokesperson declined to comment.

Donald Trump has said he will place 25% tariffs on imports from Canada and Mexico and 10% tariffs on goods from China from today.

The move raises fears of price increases for US consumers as the US president suggested he would try to blunt the impact on oil imports.

He has been threatening the tariffs to ensure greater co-operation from the countries on stopping illegal immigration and the smuggling of chemicals used for fentanyl.

And he has also pledged to use tariffs to boost domestic manufacturing.

Analysis by economics and data editor Ed Conway:
Trump’s changed tack to focus tariffs on Mexico and Canada – why?

“Starting tomorrow, those tariffs will be in place,” White House press secretary Karoline Leavitt told reporters on Friday.

“These are promises made and promises kept by the president.”

The tariffs carry both political and economic risks for Mr Trump.

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Many voters backed the Republican on the promise that he could cut inflation, but tariffs could trigger higher prices and potentially disrupt the energy, car, lumber and agricultural sectors.

Mr Trump had said he was weighing issuing an exemption for Canadian and Mexican oil imports.

“I’m probably going to reduce the tariff a little bit on that,” Mr Trump said.

“We think we’re going to bring it down to 10%.”

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The United States imported almost 4.6 million barrels of oil daily from Canada in October and 563,000 barrels from Mexico, according to the Energy Information Administration.

US daily production during that month averaged nearly 13.5 million barrels a day.

China responded aggressively to tariffs Mr Trump imposed on Chinese goods during his first term, targeting the president’s supporters in rural America with retaliatory taxes on US farm exports.

Both Canada and Mexico have said they have prepared the option of retaliatory tariffs to be used if necessary.

Canadian Prime Minister Justin Trudeau said on Friday: “We’re ready with a response, a purposeful, forceful but reasonable, immediate response.

“It’s not what we want, but if he moves forward, we will also act.”

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Mr Trudeau said tariffs would have “disastrous consequences” for the US, putting American jobs at risk and causing prices to rise.

Mexican President Claudia Sheinbaum said on Friday that Mexico has maintained a dialogue with Mr Trump’s team since before he returned to the White House.

But she emphasised that Mexico has a “plan A, plan B, plan C for what the United States government decides”.

“Now it is very important that the Mexican people know that we are always going to defend the dignity of our people, we are always going to defend the respect of our sovereignty and a dialogue between equals, as we have always said, without subordination,” she added.

Liu Pengyu, spokesman for the Chinese embassy in Washington, said the two countries should resolve their differences through dialogue and consultation.

“There is no winner in a trade war or tariff war, which serves the interests of neither side nor the world,” Mr Liu said in a statement.

“Despite the differences, our two countries share huge common interests and space for co-operation.”

Mr Trump also spoke about a plan for tariffs on the European Union without giving specific details.

He told reporters at the White House that he would “absolutely” put tariffs on the bloc, adding “the European Union has treated us so terribly”.

We all know Donald Trump loves a tariff. Not long ago he said it was his favourite word in the English language.

But one thing that might perplex people somewhat is why he is quite so keen on imposing tariffs on Mexico and Canada. After all, in his first term, his main focus when it came to trade was China.

It was under Donald Trump that swingeing new tariffs were imposed on China and Vietnam (often seen as a backdoor conduit for Chinese goods). Canada and Mexico, on the other hand, got a brand new trade deal to take the place of the long-standing NAFTA agreement.

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So what changed? While the president has talked repeatedly about how the tariffs will deter Mexico and Canada from sending opioids into the US, a more compelling explanation comes when you look at the American trade data.

There you see that since those tariffs were imposed in his first term, imports from China to the US have fallen quite considerably. Meanwhile, imports from Mexico and Canada have risen sharply, with Mexico now overtaking China as the biggest importer into the US.

If there’s one thing Donald Trump hates, about as much as he loves tariffs, it’s trade deficits – where you import more goods from a country than you export. Economists see deficits as an inevitable function of being a modern developed economy; Trump sees them as a kind of punishment – a subsidy for foreign countries.

Trump’s odd way of looking at the world

This is, to put it lightly, an odd way of looking at the world. While there are very legitimate concerns about the structure of the US economy, its inability to build its manufacturing sector and the impact of Chinese manufacturing overcapacity on the rest of the world, seeing all deficits as inherently bad is bizarre. Nonetheless, if you view the world that way, you won’t like the look of the US trade position with Mexico.

Look at those numbers and you see that the trade deficit has ballooned in recent years – and not just because of America sucking up lots of Mexican oil. The US is also importing far more cars from Mexico than it sends there.

That is, to a large extent, a function of that free trade deal, which has encouraged car manufacturers (including some American manufacturers) to assemble their cars in Mexico. However, there are also suspicions that the Mexican deficit with the US is, to some extent, a function of the way the global trading system has shifted in the past half-decade.

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Where once goods would flow directly from China to the US, there’s evidence to suggest many of them are instead flowing, mostly in the form of components, to “third countries”, including Mexico, and then being assembled into finished products and sent into the US. And this process might accelerate in the coming years.

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Look at the number of cars flowing from China to Mexico in recent years and it’s rising rapidly.

All of which is to say, there are some intriguing dynamics in international trade which have raised eyebrows in the White House.

What’s going to happen?

What would the impact of tariffs be? Well, most economic models suggest they would lift inflation and reduce economic growth. In short, they would be bad – especially if levied on nearly all goods.

But, this being Donald Trump, there are still big questions about precisely how these tariffs would actually be applied. The past few weeks have been chaotic for the normally dull world of trade economics. The coming years will be more chaotic still.