NatWest shares clock up best year since 1993… but gains in London eclipsed by Wall Street

NatWest saw its best year on the stock market for more than three decades as it joined Rolls-Royce and the owner of British Airways at the top of the Footsie leaderboard for 2024. 

Shares in the bank soared 83 per cent last year – taking total returns including dividends to 95 per cent – in a remarkable turnaround after years in the doldrums since its near-collapse in the financial crisis when it was called Royal Bank of Scotland. 

It was its biggest annual share price rise since 1993. Only BA-owner IAG did better, with returns of 99 per cent, while RollsRoyce enjoyed another stellar year under ‘Turbo’ Tufan Erginbilgic. 

Shares are up more than 500 per cent since he took over in 2023. IAG, NatWest and RollsRoyce were the biggest winners as the FTSE 100 clocked up its fourth year of gains since the pandemic. 

In a boost to millions of savers with money in shares via pensions and other investments, the blue-chip index added 52 points yesterday to take gains for 2024 to 5.7 per cent. 

The FTSE 250 rose 4.7 per cent last year, but is 15 per cent off its 2021 peak. 

London’s gains were eclipsed by those in New York, however, with analysts noting a ‘lack of enthusiasm’ on this side of the Atlantic even after the FTSE 100 hit a record high of 8,474 in May. 

The rally ran out of steam in the second half of 2024 as optimism over the political stability ushered in by Labour’s landslide election victory evaporated in the face of Chancellor Rachel Reeves’ gloomy rhetoric and £40billion tax raid in the Budget. 

Matt Britzman, equity analyst at Hargreaves Lansdown, called it ‘a year of resilience rather than runaway success for the UK’s blue-chip benchmark’ as it ‘played second fiddle to the tech-fuelled US markets’. 

Spurred on by the ‘magnificent seven’ technology stocks, the S&P 500 US benchmark index soared 25 per cent to round off its best two-year run since 1997 and 1998. 

Top of the pops: Two banks feature in the top five list, which is headed by BA-owner IAG

The tech-heavy Nasdaq index jumped 30 per cent. Chipmaker Nvidia again stood out with shares up 185 per cent as it cashed in on excitement over the boom in artificial intelligence while Apple is tipped to become the first $4trillion (£3.2trillion) company this year. 

Independent City commentator Michael Hewson said the UK stock market ‘appears to be suffering from a significant lack of enthusiasm on the part of global investors, especially relative to its peers’. 

But with London stocks seen as undervalued, analysts say further gains are on the cards this year, with Russ Mould of AJ Bell forecasting the FTSE 100 to hit 9,000 by the end of 2025. 

‘I’m more bullish now than I’ve been the last 30 years of my career,’ said Gervais Williams, manager of the Diverse Income Trust at Premier Miton Investors, pointing to the ‘low valuation’ of UK stocks. 

The rise in NatWest shares is a boost for boss Paul Thwaite, and came as the Government sold down its holding to below 10 per cent, having taken a stake of 84 per cent when it saved the lender from collapse in a £46billion rescue in the 2008-9 financial crisis. 

It is expected to sell the rest of its stake in the next six months.