NWG Natwest Group Plc

By Elena Vardon

NatWest Group said an investigation into the handling of the accounts of Brexit campaigner Nigel Farage found that it was lawful; and cut its full-year net interest margin guidance, following peer Barclays earlier this week.

In July, Farage said he was dropped as a client of Coutts, a private bank owned by NatWest, because of his political views. Alison Rose, then chief executive of NatWest, stepped down after her conversation with a journalist about Farage consumed the bank in a political drama.

Chairman Howard Davies said the report by U.K. law firm Travers Smith set out a number of "serious failings" in the treatment of 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," Davies said.

Meanwhile, the U.K. bank now sees net interest income margin for 2023 of more than 3%, from a view of around 3.15% previously. It also lowered its total income expectations to 14.3 billion pounds ($17.34 billion) from GBP14.8 billion previously, after its third-quarter earnings missed expectations.

The lender said total income rose to GBP3.49 billion for the three months ended Sept. 30 from GBP3.23 billion in the same period the previous year, missing the GBP3.585 billion forecast by analysts. Net interest income for the quarter was GBP2.685 billion compared with consensus expectations of GBP2.80 million.

Its net interest margin for the quarter was 2.94%, against expectations of 3.07%, and 3.13% in the second quarter. It attributed this to changes in deposit mix as customers moved their savings to interest-bearing accounts and the continued impact on mortgage margins.

The group posted an operating pretax profit of GBP1.33 billion compared with GBP1.09 billion for the third quarter of 2022, against the GBP1.36 billion expected in a company-compiled consensus.

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

(END) Dow Jones Newswires

October 27, 2023 03:01 ET (07:01 GMT)

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