BANKS are returning to an executive pay culture that led to the 2008 financial crash amid bumper profits fuelled by their public bailouts, experts warned today.

NatWest’s plans to increase its CEO’s maximum pay award by more than 40 per cent after a bigger-than-expected £6.2 billion profit for 2024 have sparked fresh calls for a windfall tax on banking profits.

Chief executive Paul Thwaite boasted that shedding the government’s less than 7 per cent shareholding would mark a “new, forward-looking chapter” with NatWest expecting to reach full privatisation within months.

He said that the bank is continuing work to build a “simpler, more integrated and technology-driven bank” after cutting its total workforce by more than 3 per cent in 2024 — 10 per cent among its retail workers.

NatWest accounts show that it handed out about £467 million in bonuses across eligible staff last year —  a quarter higher than the 2023 bonus pool of £356m.

Rival bank Barclays, which has a bigger investment bank, said on Thursday it distributed £1.9bn in bonuses to staff last year after growing its annual profit.

Positive Money’s Hannah Dewhirst said: “There is a bitter irony to NatWest paying bankers bumper bonuses while the public — who bailed them out 17 years ago — struggle under the weight of the same high borrowing costs now flooding its profit pool.

“But it’s not done taking payouts from the public: even though the government has sold almost all its shares in NatWest, the Treasury continues to cover the multibillion-pound interest payments that the Bank of England has been paying them since hiking rates.

“The government must reduce these interest payments to banks — as they’ve done in Europe — or place a windfall tax on bank profits to claw back the proceeds of rate rises.

“At the very least, they should reverse the tax cuts banks received under the last government.”

Luke Hildyard, executive director of the High Pay Centre think tank, warned that a “concerning trend seems to be emerging of companies showing less restraint in offering bumper pay packages to executives.

“As memories of the global financial crisis dim, banks and big corporations are returning to the pay culture that sent inequality soaring and contributed to the collapse of the economy.

“Nobody wants this and it isn’t in our economic interest.”

The Treasury was contacted for comment.