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NatWest (RBS) profit surges despite litigation charge

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5pm: NatWest pulls index down

NatWest weighed on the FTSE 100 on the final trading day of the month, ending the session as the worst performing blue-chip stock as investors focused on the litigation charges rather than its sharp rise in profits. It closed 4.5% lower.

The FTSE 100 index closed down 11.90 points at 7,237.57. The blue-chip index notched a week-to-date gain of 0.5%, and has risen 2.1% since the start of the month.


9am: London opens lower

London opened lower with traders unimpressed by NatWest’s Q3 figures and miners out of favour.

Despite a robust performance from NatWest (see below), shares were down 9.80p (4.24%) to 221.45p in the first hour of trading. Glencore fell 1.5% to 354.1p after reporting a 9% drop in coal output in its third-quarter production report.

The FTSE 100 was down 55 points (0.8%) at 7,194, with NatWest off 3.2% at 224p.


7am: NatWest operating profit surges

RBS and Alison Rose

NatWest (RBS) said its third quarter operating profit tripled to £1.07 billion despite having to account for a hefty fine for money laundering.

The profit figure, which compared to £355m for the same period last year, was well ahead of the £677 million forecast by analysts and reflected a return to greater economic activity. The attributable profit came in at £674m against £61m last time.

NatWest took a £294m litigation and conduct charge for the quarter, which includes a provision for an anticipated fine after pleading guilty earlier this month to failing to prevent the laundering of nearly £400m.

The bank said it is investing £3bn over the next three years, 80% on digital and tech transformation. Seven million retail current account customers now use digital only to interact and 13% more now transact on mobile.

Chief executive, Alison Rose, said:  “Throughout Q3, NatWest continued to deliver a strong operating performance; growing in key areas and accelerating our digital transformation to improve customer experience and make our business more efficient.”

Full story, update from media call and market reaction here


Global markets

Oil prices edged up earlier today but were heading for their first weekly losses for two months after US oil stocks rose more than expected and Iran indicated it was resuming talks with Western powers which could lead to an end to sanctions – Reuters.

Brent crude futures rose 19 cents, or 0.2%, to $84.51 a barrel by 0400 GMT, while US West Texas Intermediate (WTI) crude futures were up 2 cents to $82.83 a barrel.

Wall Street was higher as data showed Americans applied for unemployment benefits at a slower pace last week, indicating that the job market and economy were continuing to recover from the coronavirus-induced recession. However, Q3 GDP slowed sharply to 2% from 6.7% in Q2.

The Dow Jones Industrial Average was up 0.68%, the S&P 500 added 0.98% and the Nasdaq Composite was 1.39% ahead.



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