Directors’ Deals: NatWest bosses bank gains

Saying that banking has been one of the more volatile sectors this year so far verges on almost comical understatement, with the industry seemingly able to deliver both record profits at home at the same time as parts of it (in other locales) disappear into a government-rescued abyss. 

Fortunately, the UK’s banks, already rescued by taxpayers in 2008 and restructured, have proved to be made of sterner stuff.

Therefore, the timing of a notable wave of directors’ share sales at NatWest poses some interesting questions, related both to the seniority of those doing the selling and the size of the disposals. 

The biggest and most notable seller was chief financial officer Katie Murray, who sold 604,853 shares at an average of 274p a piece — netting in the region of £1.66mn. She was followed a day later by the company’s investment bank head, Robert Begbie, who sold 100,000 at the lower price of 270p. The chief executive of commercial & institutional, John-Paul Thwaite, was another notable seller with 80,000 shares offloaded at 270p.

The most pertinent question is whether any firm conclusions can be drawn. First, the lock-in period for share awards tend to expire around this time of year — between first-quarter and half-year results. But it is also clear that the momentum that moved NatWest’s shares in anticipation of higher interest rates has ebbed away, as consumers begin to move deposits around to take advantage of the best deals on savings.

In this context, it is likely that deposit churn will be the main topic of conversation this year. So it would not be unusual for the bank’s insiders to regard the current share price as being closer to the ceiling than the floor.

Unilever insider cuts stake

Consumer goods giant Unilever has experienced an eventful 12 months since activist investor Nelson Peltz secured his appointment to its board. 

Peltz had built a stake in the early months of 2022, after Unilever’s share price slumped following its botched attempt to buy GlaxoSmithKline’s consumer healthcare arm, later spun out as Haleon.

Within months of Peltz’s appointment, Unilever’s chief executive Alan Jope announced that he intended to retire this year. Hein Schumacher, who was previously an executive at Heinz during one of Peltz’s earlier activist campaigns, was hired as his replacement this January (although he won’t take up his role until July). 

This week, chief financial officer Graeme Pitkethly announced he is to follow Jope out the door. Pitkethly, who has been with Unilever for more than 20 years, will retire by May 2024.

Despite its early 2022 struggles, Unilever’s shares have been heading in the right direction over the past 12 months, gaining around a fifth.

The company has been able to carry on passing price rises to customers with only a minimal impact on volumes. In the first three months of this year, price growth of 10.7 per cent underpinned a 7 per cent increase in revenue to €14.8bn (£12.8bn) as volumes shrank by 0.2 per cent. Its South Asia arm was a standout, managing “double digit” growth in prices and positive volumes, too. Regional president Sanjiv Mehta last week took some reward for the performance, cashing in around £1.8mn of his shares. 

The sale could prove to be well-timed. Unilever’s shares came under renewed pressure in May, falling by 8 per cent. The additional squeeze on disposable incomes sparked by higher interest rates could lead more people to switch out brands in favour of cheaper own-label products.