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NatWest has reported a better-than-expected surge in half-year profits as the taxpayer-backed lender reels from the Nigel Farage de-banking debacle.
At the end of a week in which its chief executive Dame Alison Rose was forced to quit for her own role in the row, the bank revealed £3.6bn in pre-tax profits – up from the £2.6bn achieved in the same period last year as its bottom line was boosted by rising interest rates.
It made a further provision of more than £220m for bad loans in the tough economy but said it was currently seeing a low level of defaults due to higher mortgage and other borrowing costs.
NatWest updated on its progress following two days of hits to its share price, resulting in £1bn of market value being lost – a reaction to its leadership being left in tatters over the Farage fallout.
Dame Alison was forced out after admitting she had been the source of an inaccurate story in the media over the reason why the Brexit politician’s account with Coutts, a division of NatWest, had been closed down.
Coutts chief executive Peter Flavel followed her out of the door on Thursday.
Mr Farage has demanded the resignation of the entire group board, including chairman Sir Howard Davies, who had initially backed Dame Alison’s position before an apparent change of heart amid government anger.
Lenders have since been dragged into the Treasury, with regulators also applying pressure on the sector to ensure that anyone has access to banking regardless of their political views or perceived beliefs.
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The row has overshadowed the banking results season with NatWest’s figures for the first half of 2023, like rivals Lloyds and Barclays so far, showing the benefits of rising interest rates as the Bank of England continues its campaign against inflation.
Financial analysts had expected profits closer to £3.3bn for the period for the bank, which announced an interim dividend of 5.5p per share and a share buyback of up to £500m for the current second half of the year.
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