NatWest Shares Drop After Guidance Cut, 3Q Miss; Says Review Found Farage Account Closure Lawful -- Update
27 Ottobre 2023 - 9:48AM
Dow Jones News
By Elena Vardon
NatWest Group shares tumbled 16% at market open after the bank
said an investigation into the handling of the accounts of Brexit
campaigner Nigel Farage found that their closure was lawful; and
cut its full-year net interest margin guidance, following peer
Barclays earlier this week.
At 0709 GMT, shares were down 33.3 pence to 172.5 pence, their
lowest price since early 2021.
In July, Farage said he was dropped as a client of Coutts, a
private bank owned by NatWest, because of his political views.
Alison Rose, then chief executive of NatWest, stepped down after
her conversation with a journalist about Farage consumed the bank
in a political drama.
Chairman Howard Davies said the report by U.K. law firm Travers
Smith, which was commissioned by the board following Rose's exit,
set out a number of "serious failings" in the treatment of
Farage.
"Although Travers Smith confirm the lawful basis for the exit
decision, the findings set out clear shortcomings in how it was
reached as well as failures in how we communicated with him and in
relation to client confidentiality," Davies said.
Meanwhile, the lender--which is 41% owned by the British
Government--said it now sees net interest income margin for 2023 of
more than 3% as it reported results for its third-quarter that came
short of analyst expectations. This compares with its recently
trimmed view of around 3.15%. Barclays on Tuesday lowered its net
interest margin expectation for its U.K. division to between 3.05%
to 3.10%, from around 3.15% previously, underwhelming the market
and sending its shares and those of peers lower.
NatWest also lowered its total income expectation for 2023 to
14.3 billion pounds ($17.34 billion) from GBP14.8 billion
previously. For the three months ended Sept. 30, total income rose
to GBP3.49 billion from GBP3.23 billion in the same period the
previous year, but missed the GBP3.585 billion forecast by
analysts. Net interest income for the quarter was GBP2.685 billion
compared with consensus expectations of GBP2.80 million.
Its net interest margin for the quarter was 2.94%, against
expectations of 3.07%, and 3.13% in the second quarter. It
attributed this to changes in deposit mix as customers moved their
savings to interest-bearing accounts and the continued impact on
mortgage margins.
The group posted an operating pretax profit of GBP1.33 billion
compared with GBP1.09 billion for the third quarter of 2022,
against the GBP1.36 billion expected in a company-compiled
consensus.
Its common equity Tier 1 ratio--a key measure of balance-sheet
strength--stood at 13.5% at Sept. 30, while consensus had penciled
in a 13.8%.
Write to Elena Vardon at elena.vardon@wsj.com
(END) Dow Jones Newswires
October 27, 2023 03:33 ET (07:33 GMT)
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