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Hunt for next Natwest chair begins as Howard Davies says he will step down by July 2024

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Davies, an economist, was appointed chair of what was then the Royal Bank of Scotland back in 2015.

The hunt for Natwest’s next chair is underway after Howard Davies told shareholders today he will be stepping down.

Speaking at the bank’s AGM in Edinburgh, Davies said he expects a replacement to be found and handover completed by July next year. 

Noting that nine years was the maximum recommended tenure under the UK corporate governance code, Davies told shareholders: “I am approaching the point where I will have served 8 years on the board so it is appropriate to initiate the search for my successor as chairman in the coming months.”

He added that a July handover next year would allow time for a “rigorous search process and an orderly handover”. The search will be led by Natwest’s senior independent directors.

Davies, an economist, was appointed chair of what was then the Royal Bank of Scotland back in 2015. In that time he has overseen large scale restructuring of the bank, including its return to majority private ownership last year. 

Before joining the bank he had a long career in the City, acting as the first chair of the FCA’s previous incarnation, the Financial Services Authority (FSA), the director of the London School of Economics and chair of the Phoenix Group.

In the speech, Davies also touched upon issues elsewhere in the banking sector, arguing “poor risk management” and “idiosyncratic challenges” were largely to blame for failures at Silicon Valley Bank (SVB) and Credit Suisse. 

Davies affirmed that Natwest has a “robust and resilient balance sheet” although he warned the UK would face sluggish growth over the next year or so.

“The economic environment will remain challenging for some time to come, with expected further tightening of consumer spending and real incomes, which will put pressure on household budgets,” he said.

The bank will report its first quarter earnings on Friday. Banks around the world have been boosted by higher interest rates. In February, it reported that profit for 2022 hit £3.6bn, jumping 34 per cent from last year.