June 23, 2024

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NatWest hit by outlook cut and Farage probe

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NatWest shares plunged by the most since the Brexit vote after it cut its profit outlook for the year, adding to the bank’s problems on the day it published a highly anticipated report into its treatment of Nigel Farage.

The UK lender on Friday published a review by law firm Travers Smith, which found that while the decision to cut off Farage as a client was primarily commercial and therefore lawful and in line with its policies, it failed to communicate the decision properly and then mishandled his complaint.

“Coutts failed to pay due regard to the interests of Mr Farage and failed to treat him fairly in the round,” the report concluded. Travers Smith said it reviewed 3.7mn documents and interviewed 28 staff involved.

The findings of the investigation were released alongside NatWest’s third-quarter earnings, which revealed pre-tax profit of £1.3bn that missed analysts’ expectations. The bank also cut its guidance for lending margins in a signal that the benefits from higher interest rates had peaked.

“There is very little positive in this statement,” said Numis analyst Jonathan Pierce, referring to the bank’s results. “To say this is disappointing is an understatement.”

NatWest shares plunged almost 18 per cent in London in early trading, before recovering to trade down 10 per cent. That was still their worst daily fall since the day after the UK voted to leave the EU. NatWest is still 39 per cent owned by the government after its 2008 bailout.

The lawyers’ probe also determined that former chief executive Dame Alison Rose gave a BBC journalist confidential information about Farage, in a move that “probably” broke data protection laws and may also have breached regulatory rules. The Financial Conduct Authority separately announced its own probe into the matter.

The Financial Times reported on Thursday that the UK…

2023-10-27 06:16:07

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