NatWest shares plummet amid damning report on Farage account closure

NatWest Group (LSE: NWG) faced a severe blow on Friday as its shares plummeted by 16% in early trading following a downgrade to its net interest margin guidance and the release of a damning report regarding the closure of Nigel Farage’s Coutts account. The report revealed serious shortcomings in NatWest’s decision-making process, communication with Farage, and handling of his confidential information, leading to the resignation of former CEO Alison Rose in July.

The report, conducted by corporate law firm Travers Smith, found the closure of Farage’s account to be lawful but highlighted significant failings in NatWest’s treatment of the prominent politician. NatWest’s Chairman, Howard Davies, issued an apology, stating, “This report sets out a number of serious failings in the treatment of Mr Farage… We apologize once again to Mr Farage for how he has been treated. His experience fell short of the standards that any customer should expect.”

NatWest pledged to implement all recommendations made by Travers Smith and informed the public about the Financial Conduct Authority’s ongoing supervisory work into the governance, systems, and controls at both NatWest and Coutts to address any significant shortcomings.

NatWest also released its third-quarter results, indicating a rise in total income to £3.49 billion from £3.23 billion a year earlier. However, the figures fell short of analyst forecasts. Operating pretax profit increased to £1.33 billion from £1.09 billion but slightly below predictions.

The bank faced challenges in its net interest margin, which fell to 2.94% in the third quarter due to changes in deposit mix. NatWest downgraded its full-year net interest margin forecast to ‘greater than 3%’ from the previous estimate of around 3.15%.

Despite these setbacks, Chief Executive Paul Thwaite expressed confidence in NatWest’s performance, emphasising the bank’s strong foundation, sustainable profits, and robust balance sheet. Thwaite affirmed NatWest’s commitment to supporting customers and businesses amid prevailing economic uncertainties.