NatWest Sells Mentor HR Advisory Arm in Latest Streamlining Move
NatWest has offloaded its human resources advisory division to a private equity-backed competitor in the latest transaction by the banking group as it continues to streamline its operations under CEO Paul Thwaite. The FTSE 100 lender has disposed of Mentor – its small business HR support service – to Empowering People Group, a specialist HR provider backed by Limerston Capital.
Details of the Mentor HR Transaction
The financial details of the transaction have not been revealed, but the roughly 220 staff employed at Mentor are anticipated to transfer to the new owner as part of the agreement. Mentor serves approximately 100,000 small and medium-sized enterprise clients and specialises in employment law, HR, health and safety and environmental compliance.
Limerston Capital established Empowering People Group through its 2016 purchase of Adviserplus and subsequent acquisitions of legal and employment businesses including Halborns in 2020 and Learning Nexus in 2022. This acquisition strengthens their position in the HR advisory market.
CEO Paul Thwaite's Strategic Rationalisation
The transaction represents the latest in a series of moves by NatWest chief executive Paul Thwaite to rationalise the business' structure. Last year, the bank sold its workplace pensions fintech Cushon to Willis Towers Watson, as part of this ongoing streamlining effort.
Thwaite's strategy has focused on creating a more dynamic balance sheet and expanding into sectors that provide more consistent revenue streams, particularly wealth management. Banking giants have intensified their push into wealth management over the past year, with the division providing lenders with a more stable and less capital-intensive revenue stream.
NatWest's Wealth Management Expansion
This wealth management focus is evident in NatWest's substantial £2.7bn acquisition of Evelyn Partners in February – the bank's largest acquisition since the financial crisis. Thwaite characterised this transaction as establishing the "third growth engine" for the group.
Evelyn's £69bn assets under management now sit within the NatWest stable, making it the largest bank-owned wealth manager with combined assets totalling £127bn. Wealth management offers more predictable revenue thanks to its dependence on recurring fees rather than the interest rate volatility that impacts conventional lending.
Market Reaction and Integration Challenges
The Evelyn Partners acquisition did trigger some market unease, with NatWest suspending future share buybacks and disclosing plans for £150m of spending – with scope to increase if integration proves challenging – aimed at delivering roughly £100m in annual cost savings.
This strategic shift comes as Thwaite continues to reshape NatWest's operations, with the Mentor HR sale representing another step in focusing the bank's resources on core growth areas while divesting non-core business units.
