After a summer of woe, NatWest suffered further pain in a brutal start to the week.
Having faced a wave of criticism over the ‘de-banking’ of Nigel Farage by its Coutts arm – which cost chief executive Dame Alison Rose her job – brokers sounded the alarm over its bleak outlook.
Analysts at Citi, Barclays, RBC, Berenberg and JP Morgan slashed their target prices on the stock.
And Jefferies lowered its rating to ‘underperform’ from ‘buy’.
It came after third-quarter results on Friday missed market expectations and led to its steepest share fall since Brexit.
Shares down: Natwest is in the firing line once again today as a host of the City’s leading brokers sounded the alarm over its bleak outlook
The City is concerned NatWest’s net interest margin (NIM) – a measure of the difference between what it pays out to savers and charges borrowers – will fall further this year.
Berenberg’s Peter Richardson was worried about the scale of its reduction while analysts at JP Morgan added there was a ‘high degree of uncertainty around if and when NIM will stabilise’ for UK banks.
NatWest slid 2.1 per cent, or 3.85p, to 178.15p, taking losses for the year to nearly a third.
The FTSE 100 was up 0.5 per cent, or 36.11 points, to 7327.39 while the FTSE 250 rose 0.9 per cent, or 151.36 points, to 17,017.59.
Asos made gains after the reports emerged that the online fashion giant was in talks to sell Topshop to the owner of Forever 21 and Ted Baker. Shares added 0.7 per cent, or 2.5p, to 388.1p.
Commodity trading and mining giant Glencore cut its nickel production forecasts but maintained its guidance for copper, zinc, coal and cobalt output and said it was on track for profit of £2.9billion to £3.3billion from its trading division.
Stock Watch – Inspecs
Inspecs clawed back some of its losses after the eyewear firm cashed in on higher sales of glasses and lenses.
The Bath group’s revenue rose 4.6 per cent to £159.1million in the first nine months of 2023 and it is confident annual results will meet market expectations.
The manufacturing site it started building in Vietnam in May should be finished by the first half of next year.
Shares, which floated at 195p in February 2020 and peaked at 408p in January last year, gained 10 per cent, or 7p, to 77p.
It rose 1.3 per cent, or 5.75p, to 4515p. Revenues at Airtel Africa surged 19.7 per cent to £2.1billion in the six months to September 30 as the telecoms firm’s customer base grew nearly 10 per cent. Shares gained 4.6 per cent, or 5.1p, to 114.9p.
IT group Computacenter said its strong performance in Germany and the US contrasted with struggles in the UK in its third quarter, as it added 0.5 per cent, or 12p, to 2520p.
Digital 9 Infrastructure, which invests in data centres and wireless networks, gained 11.4 per cent, or 4.6p, to 44.8p as it insisted it was working to ‘maximise shareholder value’ following pressure from investor Aqua Ventures.
But AJ Bell headed in the other direction on the back of analyst concerns that the investment platform is among the ‘most exposed’ regarding risks to margins as pressure grows to pass on higher interest to customers.
Citi downgraded the stock from ‘buy’ to ‘neutral’ and cut the target price by 110p. Shares fell 2.1 per cent, or 5.4p, to 252.6p.
It has been a long week for Upland Resources. On Monday last week, shares jumped 80 per cent after the oil and gas firm rejected a takeover proposal worth £154million.
But it plunged 41.3 per cent, or 1.86p, to 2.64p on the news that it and the Takeover Panel concluded the offer ‘was not bona fide’.
There was good news for RBG after the professional services group resolved a dispute with former boss Nicky Foulston who was sacked at the end of January.
Claims against RBG amounting to more than £1.2million were settled for £500,000.
It rose 2.4 per cent, or 0.5p, to 21p. Cake Box was flat, at 132p, after it hired Martin Blair, who has been on the board since it listed in June 2018, to replace Neil Sachdev as chairman.
Sanderson Design Group, which owns seven luxury interior brands, signed a licensing agreement where Habitat, owned by Sainsbury’s, will create products such as mugs, and tea towels based on designs inspired by landscapes and nature looked after by the National Trust.
Sanderson was up 3.9 per cent, or 4p, to 107p.