NWG NatWest Group plc

   By Elena Vardon 
 

NatWest Group on Friday posted better-than-expected pretax profit for the second quarter of 2023 and trimmed its net interest margin guidance for 2023, and said it is launching an independent review into the closure of Nigel Farage's Coutts bank account.

The U.K. bank now expects its banking net interest margin for the year to be less than 3.20%, from around 3.20% previously, with the margin currently seen at around 3.15%. The company backed its other targets for 2023.

The lender posted an operating pretax profit of 1.77 billion pounds ($2.27 billion) for the three months ended June 30 compared with GBP1.40 billion for the second quarter of 2022, against the GBP1.49 billion expected in a company-compiled consensus.

NatWest--which the U.K. government has a 38.69% stake in--said total income rose to GBP3.85 billion from GBP3.21 billion, beating the GBP3.71 billion forecast by analysts. Net interest income was GBP2.82 billion, below consensus of GBP2.90 billion. Its net interest margin was 3.13% for the second quarter, below the expected 3.22%, it said.

The board declared an interim dividend of 5.5 pence a share, missing views of a 5.7 pence payout. The bank launched a GBP500 million on-market share buyback program for the second half, ahead of expectations of a GBP251 million program.

The group said in a separate statement that it is planning an independent review into account-closure arrangements at Coutts, the private bank it owns, amid fallout from the closure of ex-UKIP leader Nigel Farage's account which also led to the exit of Chief Executive Alison Rose and Coutts's CEO Peter Flavel.

Farage has claimed that Coutts closed the account because of his political views, and has kept up his attack on NatWest--even after Rose quit for admitting she was the anonymous source in an inaccurate BBC story about the closure of the account--calling for the whole board to go.

"My intention is to continue to lead the board and ensure that the bank remains sound, stable and able to support our 19 million customers," Chair Howard Davies told reporters in an earnings call.

The review, which will be undertaken by law firm Travers Smith, will first examine the decision to close Farage's account as well as the circumstances around the BBC article and whether there was any leak of confidential customer information or breach of GDPR, the bank said. A second phase will then review Coutts's account closures over the past two years.

Shares traded up 2.9% around midday at 247 pence, paring some of its losses from earlier in the week.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

July 28, 2023 06:54 ET (10:54 GMT)

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