IT is fitting that NatWest Group managed to spook investors today when we are so close to Hallowe’en.
Shares in the Royal Bank of Scotland owner had a nightmare on the stock market today, suffering their sharpest intra-day fall since the Brexit vote of June 2016, as investors showed their concern over a downgrade to the outlook for net interest margins at the state-backed institution.
Compounding a frightening day at the office were the findings of the independent report into the Nigel Farage scandal, which led the lender to admit to a “number of serious failings” into how managers at Coutts had handled the financial affairs of the former UKIP leader.
NatWest had already been seriously embarrassed by the Farage affair, which centred on events leading to the decision by Coutts to close the accounts of the politician and how the matter ended up in the public domain.
READ MORE: Bumper pay-off to ex-boss hangs over Edinburgh-based bank
The episode cost Dame Alison Rose her job as chief executive in July, after she admitted to leaking information about Farage’s accounts to the BBC. Dame Alison, who had been a feted figure in the city, had to apologise to Farage and there was more medicine for the bank to swallow today, when law firm Travers Smith issued its phase one findings into the controversy.
The review found the decision to close the accounts had been lawful and had not been the ultimate determining factor in severing ties with the politician. But the report, which the bank said it accepts and will implement in full, “sets out a number of serious failings in the treatment of Mr Farage”.
Chairman Sir Howard Davies said: “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. His experience fell short of the standards that any customer should expect.”
READ MORE: Is Scotch whisky on cusp of new global boom?
Unfortunately for NatWest, the Travers Smith report was not the only ghoulish aspect to the day. Its downgrade to net interest rate margins, driven by customers switching balances from current accounts to interest-bearing savings accounts, unnerved investors. Shares fell as low as 18% in early trading before recovering some of their poise.
Moreover, further negative publicity could be on the way for the bank. The lender was criticised after it emerged in August that Dame Alison was in line to receive a pay-off worth £2.43 million. There was no update to the review of Dame Alison’s pay today, but you can be sure there will be plenty of interest indeed when the bank eventually reaches the end of its deliberations.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel