NatWest Reports Better-Than-Expected Half-Year Profits Despite Farage De-Banking Controversy
Friday 28 July 2023 07:14, UK – NatWest has announced a surge in half-year profits, surpassing expectations, despite the recent controversy surrounding the de-banking of Nigel Farage. The taxpayer-backed lender reported pre-tax profits of £3.6bn, up from £2.6bn in the same period last year, thanks to rising interest rates.
Following a week of turmoil that led to the resignation of CEO Dame Alison Rose, NatWest revealed its strong financial performance. The bank also made a provision of over £230m for bad loans in the challenging economic climate. However, it noted that the current level of defaults remains low due to the increasing costs of mortgages and other borrowings.
NatWest’s share price took a hit over the past two days, resulting in a loss of £1bn in market value. This decline was a direct consequence of the fallout from the Farage controversy, which left the bank’s leadership in disarray. Dame Alison was forced to step down after admitting that she had provided inaccurate information to the media regarding the closure of Farage’s account with Coutts, a division of NatWest. Coutts CEO Peter Flavel also resigned on Thursday.
Nigel Farage has called for the resignation of the entire group board, including chairman Sir Howard Davies, who initially supported Dame Alison’s position before changing his stance in response to government criticism.
Regulators and Government Pressure on Banks
The de-banking controversy has drawn attention to the banking sector, with regulators and the government pressuring banks to ensure that individuals have access to banking services regardless of their political views or perceived beliefs.
The fallout from the Farage incident has overshadowed the banking results season. NatWest, along with rivals Lloyds and Barclays, has reported positive figures for the first half of 2023, benefiting from the rise in interest rates.
For more information on the ousting of Dame Alison Rose and the implications for NatWest, read our in-depth analysis.
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