NatWest shares sink 14% amid regulatory criticism alongside Q3 earnings
The banking crisis and the failure of regulatory compliance around the cancellation of the Coutts accounts of Nigel Farage have overshadowed NatWest’s third quarter earnings release.
Earnings came in in line with forecasts although the bank did say that competition in the retail sector has hit margins. However, alongside the release was the legal document outlining the regulatory failures the bank had encountered.
(AI Video Transcript)
NatWest
NatWest bank recently released its earnings report for the third quarter. The report showed that the bank's profits were as predicted, but there have been some worrisome developments that have caused the company's share prices to drop. One issue is a controversy involving Nigel Farage, which has resulted in criticism from regulators and negative sentiment from investors.
NatWest's challenges
Despite the anticipated increase in pre-tax operating profit, NatWest has been facing challenges. Competition among other banks for customer funds has made it difficult for NatWest to maintain its net interest margin. In addition, the bank's operating expenses have risen significantly, putting more pressure on its financial performance.
These challenges are evident in the share price chart, which shows a significant drop in the company's share prices. In fact, the share price has fallen by almost 15% and is now approaching a support line that dates back to February 2021. Although there has been a slight recovery, the share price is still down by 11.6% for the day.
Nigel Farage
One of the main challenges NatWest is facing is regulatory issues, which have drawn criticism from regulators themselves. The controversy involving Nigel Farage has also cast doubt on the bank's reputation and compliance with regulations. These concerns have directly affected the share price, as investors react to the negative developments.
NatWest's ability to improve its net interest margin
Furthermore, the intense competition among high street banks to attract customer deposits has limited NatWest's ability to improve its net interest margin. The rising operating expenses have also contributed to the decline in share prices. Investors are evaluating the bank's ability to manage expenses and generate sustainable profits, which has added to the negative sentiment surrounding the stock.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Take a position on indices
Deal on the world’s major stock indices today.
- Trade the lowest Wall Street spreads on the market
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
