Proactive Investors - Some more on NatWest now which admitted to “serious failings” in the treatment of Nigel Farage and “clear shortcomings” in how the decision to close his bank account with Coutts came about.
The high street lender was commenting after findings from the Travers Smith independent review into the decision to close the account and a potential breach of confidentiality.
The debacle claimed the head of the previous chief executive Alison Rose after she disclosed details of the account closure to the BBC’s Business Editor, Simon Jack.
The review did point out that Rose played no part in the decision to close the account, this was made at a Wealth Reputational Risk Committee meeting in November 2022.
The review found that the bank had been compliant with legal obligations, including customer confidentiality and data protection laws, and that the exit decision was lawful.
But it also identified a number of shortcomings in how the decision was reached, how the bank communicated with Farage and how it treated his confidential information.
NatWest said it has accepted - and will implement - all of the recommendations made by Travers Smith.
The bank said it was considering these findings and deciding on appropriate outcomes, including a “disclosure obligation” with regard to Rose’s pay.
NatWest Chairman, Sir 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.”
British Airways owner enjoys best ever third quarter
British Airways-owner International Consolidated Airlines Group (LON:ICAG) enjoyed a 43% increase in operating profit to €1.7 billion in what was its best-ever third quarter, helped by improved demand and lower costs.
The FTSE 100-listed airline said bookings for the fourth quarter are in line with expectations, meaning there is no change in full-year guidance.
“We expect 2023 to be a year of strong recovery in our margins, operating profit and balance sheet and towards pre-COVID-19 levels of capacity,” the Anglo-Iberian group said.
It used the cash generated during the period to trim borrowings built up during the pandemic, cutting net debt to €8 billion at the end of September from €10.4 billion a year earlier.
Operating profit margins improved to 20.2% from 16.6% due to an 18% boost to capacity since last year, supported by 20 aircraft deliveries year to date.
Passenger unit revenue increased 2.2% year-on-year, while non-fuel costs for the quarter were down 3.5% and fuel costs down 6.2%.
NatWest margins under pressure, Farage exit was "lawful"
NatWest Group PLC (LON:NWG) saw its net interest margin fall in the third quarter as more customers moved funds to savings accounts to benefit from higher interest rates.
The bank also published findings from the Travers Smith review into the bank’s closure Nigel Farage’s accounts with Coutts which saw the previous chief executive Alison Rose lose her job.
The report said the “exit decision was lawful and was made in accordance with the relevant bank policies and processes, but also identifies a number of shortcomings in how the decision was reached, how the bank communicated with Mr Farage and how it treated his confidential information.”
NatWest Group Chairman, Sir Howard Davies, said: "This report sets out a number of serious failings in the treatment of Mr Farage."
Back to the results, and the high street lender said net interest margin (NIM) of 2.94% in the quarter ended September was 19 basis points lower than the second quarter with the reduction largely due to changes in deposit mix.
Customers have shifted balances from non-interest bearing current accounts to interest bearing savings accounts, as well as the continued impact on mortgage margins as the higher margin Covid-era book rolls off and is replaced at lower margins
NatWest said it expects full-year NIM to still greater than 3%, compared to the 3.11% reported year-to-date.
In the third quarter, total income rose to £3.49 billion from £3.23 billion a year ago with attributable profit of £866 million, up from £187 million and a return on tangible equity of 14.7%.
Net loans to customers increased by £1.8 billion to £354.5 billion including a £1.3 billion uplift in Commercial & Institutional.
Retail Banking gross new mortgage lending was £7.5 billion in the quarter, down slightly from £7.6 billion in the second quarter.
Bad debt charges were £229 million, down from £247 million last year, or 24 basis points of gross customer loans, and the bank expects its impairment loss rate for 2023 to be below its through the cycle range of 20-30 basis points.
Customer deposits of £423.5 billion were £2.4 billion higher than the second quarter while the Common Equity Tier 1 ratio of 13.5% was in line with the position at the end of June.
FTSE set for modest losses at the open
The FTSE 100 is expected to post modest gains when trading starts on Friday after a torrid week ahead of a US inflation reading.
Spread betting firms are calling London’s lead index up by around 11 points after closing down 59.77 points at 7,354.57 on Thursday.
Better-than-expected results from Amazon (NASDAQ:AMZN) after the US close on Thursday lifted the mood after Wall Street saw further heavy losses with the tech-heavy Nasdaq shedding another 1.8%.
The online retailer beat sales and expectations, sending shares more than 5% higher in after hours trading.
Back in London, and the early focus will be updates from NatWest and British Airways owner, International Consolidated Airlines.
Attention will switch back to the US for personal consumption expenditures data, the Federal Reserve’s preferred inflation gauge.