NatWest Group has reported better-than-expected pretax profit for the second quarter of 2023, demonstrating robust financial performance. The UK bank has also adjusted its net interest margin guidance for 2023. Furthermore, NatWest Group has announced the initiation of an independent review into the closure of Nigel Farage's Coutts bank account.
Improved Profit and Margin Expectations
NatWest Group now anticipates its banking net interest margin to be less than 3.20% for the year, compared to the previous expectation of around 3.20%. Currently, the margin is approximately 3.15%. Despite this adjustment, the company remains confident in achieving its other targets for 2023.
Strong Financial Figures
For the three months ending on June 30, NatWest Group achieved an operating pretax profit of £1.77 billion ($2.27 billion). This surpasses the £1.40 billion recorded during the second quarter of 2022 and also exceeds the consensus forecast of £1.49 billion compiled by the company.
Total income for the period rose to £3.85 billion, outperforming analysts' expectations of £3.71 billion. However, net interest income was slightly lower than consensus at £2.82 billion, compared to the forecasted figure of £2.90 billion. The net interest margin for the second quarter came in at 3.13%, below the anticipated level of 3.22%.
NatWest Group is currently 38.69% owned by the UK government.
Dividend Announcement and Share Buyback Program
The board of the bank has declared an interim dividend of 5.5 pence per share, slightly below the expected payout of 5.7 pence. In addition to this, the bank has launched a GBP500 million on-market share buyback program for the second half. This exceeds the anticipated program size of GBP251 million.
Independent Review into Account-Closure Arrangements at Coutts
Following the closure of ex-UKIP leader Nigel Farage's account at Coutts, the bank's private bank, the group has announced plans for an independent review. This review aims to investigate the account-closure arrangements at Coutts. It is worth noting that the closure of Farage's account has resulted in the departure of Chief Executive Alison Rose and Coutts' CEO Peter Flavel.
Farage has expressed his belief that the account closure was due to his political views. Criticizing NatWest, he continues to call for the resignation of the entire board. Notably, Rose had recently admitted to being the anonymous source in an inaccurate BBC story regarding the closure of Farage's account.
As a result of these developments, shares are currently trading up 2.7% at 246.3 pence.