NatWest sells human resources advisory business amid strategic streamlining
NatWest has sold its human resources advisory division to a private equity-backed competitor, continuing its operational streamlining efforts. The FTSE 100 bank has disposed of Mentor, its small business HR support service, to Empowering People Group, a specialist HR provider backed by Limerston Capital, reports BritPanorama.
This transaction represents another strategic move by CEO Paul Thwaite as he aims to rationalise the bank’s business structure. Mentor provides HR services to around 100,000 small and medium-sized enterprise clients, focusing on employment law, health and safety, and environmental compliance.
Limerston Capital established Empowering People Group through its 2016 acquisition of Adviserplus, followed by additional acquisitions to enhance its offerings. The financial specifics of the Mentor deal have not been disclosed, but it’s anticipated that the roughly 220 staff currently at Mentor will transfer to the new owner.
Thwaite’s strategy includes a shift towards areas that offer more stable revenue streams, particularly in wealth management, a sector that has seen increasing interest from banking giants over the last year. This follows NatWest’s significant £2.7 billion purchase of Evelyn Partners in February, marking its largest acquisition since the financial crisis.
Thwaite has described this latest transaction as establishing a “third growth engine” for NatWest, with Evelyn’s £69 billion assets now augmenting the bank’s total assets to £127 billion, making it the largest bank-owned wealth manager. However, this expansion raised some market concerns, prompting NatWest to halt future share buybacks due to £150 million in integration spending designed to achieve approximately £100 million in annual cost savings.
The ongoing changes within NatWest illustrate a broader trend in the banking sector, where firms are increasingly pivoting towards diversified revenue sources in response to fluctuating interest rates. This strategic focus on stability and growth reflects an adaptation to the evolving landscape of financial services, highlighting the nuanced challenges and opportunities banks face today.
