NatWest H1 profits beat expectations as Rose row rumbles on
UK bank NatWest on Friday reported better-than-expected interim profits only days after it was rocked by the resignation of chief executive Alison Rose over leaking of details of hard-right former political party leader Nigel Farage.
Source: Sharecast
The bank posted pre-tax profit of £3.6bn, up from £2.6bn a year earlier and better than the £3.3bn estimated by analysts. It also announced a £500m share buyback.
Bank net interest margin, a key measure of profitability that indicates the difference between savings and loan rates – came in at 3.20% compared with 2.58% in 2022. NatWest also set aside £223m for potential bad loans, a major shift from the £54m release a year ago.
Rose was forced to quit earlier this week after the clumsy way in which Farage's accounts with NatWest's private banking unit Coutts, after he revealed documents showing it had said his views were not in line with that of lender.
She on Wednesday admitted to a "serious error of judgment" in leaking the details to a BBC journalist. The row claimed a second scalp on Thursday when Coutts CEO Peter Flavel also resigned over the affair.
Second-quarter NIM of 3.13% was 14 basis points lower than the prior three months reflecting asset margin pressure and changes in deposit mix from non-interest bearing to interest bearing balances, NatWest said.
It also warned that full-year NIM is now expected to be less than 3.20%, with a current view of around 3.15%, as the sector comes under pressure to start paying savers better rates on deposits after more than a decade of feeble returns amid accusations of profiteering during the cost-of-living crisis.
Reporting by Frank Prenesti for Sharecast.com