NatWest sells Mentor HR advisory arm as it continues streamlining its operations

FTSE 100 bank offloads human resources advisory business to private equity-backed Empowering People Group as CEO Paul Thwaite continues strategic streamlining

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.

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.

Limerston established the group through its 2016 purchase of Adviserplus and subsequent acquisitions of legal and employment businesses including Halborns in 2020 and Learning Nexus in 2022.

Mentor serves approximately 100,000 small and medium-sized enterprise clients and specialises in employment law, HR, health and safety and environmental compliance.

The financial details of the transaction have not been revealed. The roughly 220 staff employed at Mentor are anticipated to transfer to the new owner as part of the agreement, which was reported by Sky News.

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 reported by City AM.

Thwaite’s strategy has focused on a more dynamic balance sheet and expansion into sectors that provide a more consistent revenue stream such as 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, thanks to its dependence on recurring fees rather than the interest rate volatility that impacts conventional lending.

NatWest spent a substantial £2.7bn – its largest acquisition since the financial crisis – to acquire Evelyn Partners in February, wresting the wealth manager from private equity owners Permira and Warburg.

Thwaite characterised the transaction as establishing the “third growth engine” for the group, with Evelyn’s £69bn assets under management now sitting within the NatWest stable, making it the largest bank-owned wealth manager with combined assets totalling £127bn.

The acquisition did trigger some market unease, though, as NatWest suspended future share buybacks and disclosed plans for £150m of spending – with scope to increase if integration proves challenging – aimed at delivering roughly £100m in annual cost savings.