NatWest Group announced its better-than-expected pretax profit for the second quarter of 2023. The bank also adjusted its net interest margin guidance for the year and revealed plans to conduct an independent review of the closure of Nigel Farage's Coutts bank account.
Improved Profit and Adjusted Guidance
NatWest Group's operating pretax profit for the three months ending June 30 amounted to £1.77 billion ($2.27 billion). This figure exceeded the company's compiled consensus of £1.49 billion for the same period last year. Total income rose to £3.85 billion, beating analysts' forecast of £3.71 billion.
However, the bank has revised its banking net interest margin guidance for 2023. It now expects the margin to be lower than the previously projected 3.20%. The current margin stands at around 3.15%.
Independent Review Initiated
Together with these financial updates, NatWest Group announced its plans to conduct an independent review into the closure of Nigel Farage's Coutts bank account. The bank aims to address any concerns regarding this issue.
Dividend and Share Buyback Program
Despite missing views of a 5.7 pence payout, the board declared an interim dividend of 5.5 pence per share. Additionally, NatWest Group surprised investors by launching a £500 million on-market share buyback program for the second half of the year, surpassing expectations.
NatWest Group remains committed to achieving its other targets for 2023 while striving to enhance its performance in the dynamic banking landscape.
Independent Review into Account-Closure Arrangements at Coutts
The group has announced plans for an independent review into account-closure arrangements at Coutts, the private bank it owns. This comes in response to the controversy surrounding the closure of ex-UKIP leader Nigel Farage's account, which ultimately led to the departure of Chief Executive Alison Rose and Coutts's CEO Peter Flavel.
Farage has publicly stated that his account was closed by Coutts due to his political views. Despite Rose's resignation after admitting to being the anonymous source in an inaccurate BBC story about the closure, Farage has continued to criticize NatWest and has called for the entire board to step down.
During an earnings call with reporters, Chair Howard Davies expressed his intention to lead the board and ensure the bank remains stable and capable of supporting its 19 million customers.
Despite recent setbacks, NatWest's shares traded up 2.9% around midday at 247 pence, demonstrating a partial recovery from earlier losses.