NatWest Group is looking to offload Cushon, the workplace pensions provider it acquired only two years ago, as its chief executive refocuses one of Britain’s biggest high street banks on its core strategic priorities.
Sky News has learnt that NatWest is working with advisers on a sale of Cushon, for which it paid £144m in exchange for a controlling stake.
City sources said the bank was in detailed talks with a number of potential buyers of the business.
Cushon offers workplace pension products as well as a range of workplace ISAs, including Junior ISAs, Lifetime ISAs and General Investment Accounts.
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NatWest’s acquisition of the business was aimed at diversifying its non-interest income by offering Cushon’s products to the bank’s commercial and business banking customers.
Cushon serves roughly 650,000 members across approximately 21,000 employers.
Its master trust offering has close to £3bn of assets under management and administration, with £17.4m in revenue generated from this area last year – 97% of Cushon’s total revenues.
NatWest owns an 85% stake in Cushon, with the remainder held by the subsidiary’s management.
A market source said that Cushon had drawn interest from a significant number of strategic players in the pensions market amid a growing push for consolidation.
The government announced major pensions reforms this year aimed at driving greater scale and reducing unnecessary bureaucratic expenses, with a view to defined contribution schemes managing at least £25 billion in assets by 2030.
A disposal of Cushon would reflect the strategic priorities of Paul Thwaite, NatWest’s chief executive, which include a bank-wide simplification programme and more active balance sheet and risk management.
Under Mr Thwaite, NatWest has considered a small number of larger-scale acquisitions, including that of Santander UK.
That deal did not progress because of NatWest’s determination to pay a price that would be deemed attractive by its shareholders.
NatWest returned to full private ownership earlier this year when the government sold the last of the shares it acquired as part of the £45.5bn rescue in 2008 of what was then Royal Bank of Scotland.
A NatWest Group spokesperson said: “We do not comment on speculation.
“Our focus remains on delivering for our customers.”
