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NatWest shares plunge after cutting profit outlook and admitting ‘serious failings’ over treatment of Nigel Farage

NatWest shares set for biggest one-day drop since Brexit vote, as Farage attacks ‘whitewash’ report

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NatWest’s decision to close Nigel Farage’s bank accounts was lawful but there were “serious failings” in how it treated the former Ukip leader, an independent review commissioned by the bank has found.

Lawyers hired by NatWest Group said the lender had acted “in accordance with the relevant bank policies and processes” when it decided to shut the accounts Farage held at its private bank Coutts.

However, the initial report by the law firm Travers Smith also identified “a number of shortcomings”, related to how the bank reached that decision, how it communicated with Farage, and how it treated his confidential information.

The Financial Conduct Authority said it had reviewed the findings of the initial independent report, and said it highlighted “potential regulatory breaches” and a number of areas for improvement.

That included how the bank considers the potential closure of accounts, handles complaints from customers, and the effectiveness of its “governance mechanisms".

The NatWest chair, Howard Davies, said: “This report sets out a number of serious failings in the treatment of Mr 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.

“We apologise once again to Mr Farage for how he has been treated. His experience fell short of the standards that any customer should expect.

“Our job now is to make sure that does not happen again. The bank is committed to implementing all the recommendations made by Travers Smith and we are making substantive changes to our policies and procedures, in particular to ensure that the lawfully protected beliefs or opinions of customers do not play any role in our decision-making.”

Nigel Farage called the report a "whitewash", and said that his support for Brexit was a factor in the decision to close his accounts.

He said: “Travers Smith has taken a very mealy-mouthed approach to this complex issue. The law firm argues that my political views ‘not aligning with those of the bank’ was not in itself a political decision. This is laughable.”

NatWest has also reported a rise in profits for the last quarter.

The bank made an attributable profit of £866m in July-September, up from £187m in the third quarter of 2022.

Operating profits grew to £1.3bn, up from £1.086bn a year before, close to the £1.4bn forecast by analysts.

However, NatWest cautions that the economic outlook and its impact on customer behaviour “remain uncertain”.

The bank has cut its profit outlook, as the earnings boost from higher interest rates fades.

It has cut its forecast for net interest margin – a key measure of lending profitability – to “greater than 3%” from a previous view of about 3.15%.

NatWest shares have tumbled by 16% at the start of trading in London.

This puts NatWest at the bottom of the FTSE 100 leaderboard, and on track for its biggest one-day drop since 24 June 2016, after the UK voted to leave the EU in the Brexit referendum.

Other bank shares are also weakening, with Lloyds down 3.5% and Barclays losing 2%.

The agenda
• 1.30pm BST: US PCE survey of inflation
• 3pm BST: US consumer confidence survey from University of Michigan

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