May 24, 2024

NatWest report 38% rise in profits as two chief executives quit over Nigel Farage row

NatWest Group has reported a rise in half-year profits amid turmoil at the top involving the resignations of two chief executives over the leaking of details of Nigel Farage’s bank account.

The bank was dragged into an embarrassing row when Mr Farage revealed that his account with private bank Coutts, owned by the NatWest Group, was closed partly because of his political views.

The taxpayer-backed lender revealed an operating pre-tax profit of £3.6 billion for the latest half-year, up from £2.6 billion in the same period last year.

But senior bosses are set to face scrutiny from shareholders after the shock departure of NatWest chief executive Dame Alison Rose wiped 3.6 per cent from the bank’s share price on Wednesday. It knocked £850m from NatWest’s value and hit taxpayer shares by more than £320m.

And on Thursday, the furore claimed a second bank boss’s scalp, when Peter Flavel, chief executive of upmarket bank Coutts resigned over his role in the closure of the accounts of the former Ukip leader.

Dame Alison apologised and admitted making a “serious error of judgment” when she discussed his bank account with a BBC journalist.

The BBC News story had wrongly said the closure had been motivated by commercial reasons only, citing a “failure” by Mr Farage to meet a £1m borrowing requirement.

But Brexiteer Mr Farage presented a dossier showing his Coutts account had been closed partly due to his political views. Internal documents labelled him as “xenophobic and racist”.

Dame Alison later admitted she was the source of the inaccurate BBC story.

Earlier this year, she received a substantial payout of more than £5m following robust profits – the first time NatWest had granted a bonus to a chief executive since the government’s rescue of the company during the 2008 financial crisis.

The departures of Dame Alison and Mr Flavel have piled pressure on Sir Howard Davies the chairman of NatWest, who initially expressed “full confidence” in Dame Alison.

NatWest, which is 39 per cent-owned by British taxpayers, saw profit in the first half of the year jump by nearly £1 billion, beating forecasts as the banking group benefited from higher borrowing costs and greater lending.

Analysts had been expecting a lower profit of £3.3 billion for the latest half-year.

But the bank said it expects higher interest rates to be largely offset by savings rates and mortgage income reductions through the second half of the year.

Finance boss Katie Murray said the bank’s performance in the first half of the year was “strong”.

“As a result, we are able to continue lending to our customers and delivering sustainable returns and distributions to our shareholders, even in the current uncertain economic environment,” she said.

And Ms Murray added: “Although arrears remain low, we know that people, families and businesses are anxious about their finances and many are really struggling.

“We are being proactive in our support for those who are hardest hit, helping to build the financial resilience of the customers and communities we serve.”

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