NatWest shares look cheap after the Nigel Farage debacle

 NatWest shares look cheap after Nigel Farage debacle

NatWest (LSE: NWG ) shares have been falling this year and now look like a pretty cheap buy, especially after the recent scandal involving one Nigel Farage's account.Shares were priced at £3.09 in February before the US-led banking crisis knocked shares down to £2.47 by last week. But today I could only buy for £2.39. I must say it looks tempting

The award also looks understated. NatWest now trades at around six times earnings, a nice advantage compared to the FTSE 100 average of 14. Although I will say it is in line with other UK banks such as Lloyds (6.5) and HSBCThe yield also increased. With a lower price, I would now be looking at a dividend yield of 6.52%, one of the highest yields on the Footsie.

But while I have no doubt that NatWest shares look cheap, whether I will buy here is another question. To answer that, I'll have to go back to that Farage story.To recap, high net worth bank Coutts - part of the NatWest Group - has suspended Nigel Farage's account. This made headlines when the former politician posted about it on social media. He said he was given no reason to act.

What happened

Shortly afterwards, the BBC published a 'verified' story saying the reason was that he didn't have enough money in the account. He did not meet the minimum requirements and was therefore no longer eligible.

It turned out that the source of the story was the NatWest CEO, Ms Alison Rose, who not only leaked confidential customer information, but lied when she did it.So basically we have a CEO who broke the number one rule of banking: don't divulge client details. Not only that, but she planted a story in the press to make one of her customers look bad. That's terrible if you ask me.

But it's worse. Farage got his hands on a 40-page file that the bank had on him. The dossier criticized his "xenophobic, chauvinistic and racist views" which were "at odds" with the bank's ethos.So the bank tried to close someone's account because of their political beliefs. This doesn't sit well with me and makes me wonder what the company's priority is. I mean, why were the resources spent on this task in the first place?

Purchase?

When it all came out, Rose resigned, but not before the boardroom voted unanimously that she still trusted her. This is despite the aforementioned issues, including account suspensions for political reasons. All this and they stood by her to the man.This suggests to me that the higher ups at NatWest are more interested in scoring political points than doing business. Do I want to buy shares in a company with this kind of management? The answer is no.

The post NatWest shares look cheap after Nigel Farage debacle appeared first on The Motley Fool UK.Should you invest £1,000 in NatWest Group right now?When investment expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter, which has been running for almost a decade, has provided thousands of paying members with recommendations on the best stocks from the UK and US markets.

And right now, Mark thinks there are 6 exceptional stocks that investors should consider. Want to see if NatWest Group has made the list?Interest rates are rising AGAIN. Here's how I can profit from the FTSE 100With big H1 profit rise, is NatWest share price on the rise?Are NatWest shares too risky after CEO exit?Are NatWest Group and British American Tobacco the best FTSE 100 deals?Down 26%, time to buy this high-dividend FTSE 100 bank?

HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. John Fieldsend has positions in Lloyds Banking Group Plc. The Motley Fool UK recommended HSBC Holdings and Lloyds Banking Group Plc. The opinions expressed about the companies mentioned in this article are the opinions of the author and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that we are better investors with a diverse range of insights.

The financial scene is no stranger to volatility and the recent Nigel Farage debacle certainly made some waves. Amidst the uncertainty, however, savvy investors spot an interesting opportunity - NatWest shares. This article delves into why NatWest shares look cheap following the Nigel Farage controversy and examines the relative keywords that underline this potentially rewarding investment.

The Nigel Farage debacle and its impact

The recent involvement of Nigel Farage, a prominent political figure, in the scandal has put NatWest in the spotlight. However, it is imperative that investors distinguish between political incidents and company fundamentals. The value of a company like NatWest lies in its long-term growth potential, financial health and market position.

NatWest Basics

NatWest, one of the UK's largest banking institutions, boasts a solid foundation and an established presence in the financial industry. Despite recent events, the bank has a diverse portfolio that offers a range of financial services to individuals and businesses. In addition, NatWest is a formidable player in the market thanks to its strong financial performance and stable revenue streams.

Promising valuation metrics

With the recent turbulence, NatWest shares have seen their value fall, so they appear relatively cheap compared to their historical prices and industry peers. Investors aware of the potential for share price recovery may find current valuations attractive.

Long-term growth prospects

While short-term disruptions such as the Farage controversy can cause volatility, prudent investors should focus on the long-term outlook. NatWest's strategic initiatives such as digital banking expansion, cost optimization and innovation indicate a commitment to future growth and adaptation to changing market dynamics.

Stability and dividend yield

Investors often look for stability and consistent income in their portfolios. NatWest's dividend yield has historically been competitive, providing investors with a regular stream of income even in uncertain times. With a solid history of dividend payouts, the bank's commitment to shareholder returns is evident.

Risk management and compliance

Following the Nigel Farage controversy, investors may be concerned about potential risks to NatWest's operations and reputation. However, the bank has a robust risk management framework and is subject to strict regulatory oversight. Compliance with regulatory standards ensures that NatWest is equipped to meet challenges and protect investors' interests.

The Nigel Farage debacle has undoubtedly affected NatWest shares, creating a perceived bargain for investors. However, prudent investors understand the importance of looking beyond short-term noise and focusing on a company's fundamentals. NatWest's established market position, sound financials and commitment to growth make it an attractive opportunity for those looking for long-term value. By capitalizing on current discounted share prices, investors can potentially earn significant returns in the future. As with any investment, due diligence is critical and you are advised to seek professional financial advice to make informed decisions about investing in NatWest shares.