Farage row overshadows profits surge at NatWest
The scandal surrounding former Brexit party leader Nigel Farage, which led to the departure of CEO Dame Alison Rose, overshadowed a strong performance by NatWest.
Trading as Royal Bank of Scotland north of the border, it reported an operating profit before tax of £3.6bn for the first half, representing a sharp rise in the £2.6bn posted last year. Attributable profit came in at £2.3bn against £1.9bn in the first half of 2022.
The bank, which is 38.53% owned by the taxpayer following its bailout in 2008, reported £1.8bn operating profit in Q2’23, unchanged from the first quarter.
However, the impairment charge rose to £153m in Q2’23 against £70m in the first three months. The net interest margin was 3.13% from 3.27% in Q1’23.
The bank declared an interim dividend of 5.5p per share and announced a share buyback of up to £500 million for the second half of the year.
Dame Alison stepped down on Wednesday after admitting to a “serious error of judgment” in discussing Mr Farage’s relationship with the bank with a BBC journalist, while Coutts CEO Peter Flavel departed yesterday “by mutual consent”.
During a media conference call, chairman Sir Howard Davies admitted: “The last few weeks have been a painful period for the bank.”
He explained that the board believed its initial decision to support Dame Alison had been “rational” but it became clear that she would face political “headwinds” and her position became untenable.
He said the bank had “lost a great leader” and added that he would not be bringing forward his own earlier decision to retire, saying the bank needed stability.
Interim CEO Paul Thwaite, the former commercial banking boss who was installed for an initial 12 months, added: “It is an understatement to say that these are not ideal circumstances for anyone to take over.”
In a statement with the results, Katie Murray, chief financial officer, commented: “NatWest Group’s strong performance for the first half of the year is underpinned by our robust balance sheet, with a well-diversified loan book, robust liquidity and stable deposit base.
“As a result, we are able to continue lending to our customers and delivering sustainable returns and distributions to our shareholders, even in the current uncertain environment.
“Although arrears remain low, we know that people, families and businesses are anxious about their finances and many are really struggling. We are being proactive in our support for those who are hardest hit, helping to build the financial resilience of the customers and communities we serve.”
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