NatWest share price drops to bottom of FTSE as bank left reeling after Nigel Farage row

Shares in NatWest Group have suffered a 3.5 per cent decline, which comes in as its worst drop in a month.

The slump in share price erased £600million from the bank's stock market value, which is still 38 per cent owned by the taxpayer.

The crisis shows little sign of relenting, for Farage has since called for whole board to resign in the wake of the Coutts banking scandal.

Reverberations have been felt across the sector.

Lloyds Banking Group shares dropped by 3 per cent on the FTSE 100 Index despite posting surging half-year profits on Wednesday, while Barclays stock was also 1.9 per cent lower.

The City Minister, Andrew Griffith, has supported the overnight resignation of the NatWest chief, and hinted that her defenestration could spell widespread change in the banking industry.

Reacting to the resignation, Griffith tweeted a response to GB News: “It is right that the NatWest CEO has resigned.“This would never have happened if NatWest had not taken it upon itself to withdraw a bank account due to someone’s lawful political views.

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“That was and is always unacceptable.

“I hope the whole financial sector learns from this incident. Its role is to serve customers well and fairly - not to tell them how or what to think.”

Meanwhile, a Number 10 source said the Prime Minister "was concerned about the unfolding situation" but believes "Alison Rose has done the right thing in resigning."

In a statement released in the early hours of this morning before the markets open, NatWest Group chairman Sir Howard Davies said that an agreement had been reached for the chief executive to step back from her role "by mutual consent".

Last night Rose admitted to a “serious error of judgment” when she discussed Farage’s relationship with private bank Coutts, owned by NatWest Group, with a BBC journalist.

Initially the NatWest board had said it was standing by their beleaguered leader.

Pressure mounted on Rose when it became clear that Government ministers had “serious concerns” over her conduct.

Confirming her departure, Davies said: “The Board and Alison Rose have agreed, by mutual consent, that she will step down as CEO of the NatWest Group. It is a sad moment.

“She has dedicated all her working life so far to NatWest and will leave many colleagues who respect and admire her.”

In a statement of her own, Rose said: “I remain immensely proud of the progress the bank has made in supporting people, families and business across the UK, and building the foundations for sustainable growth.

“My NatWest colleagues are central to that success, and so I would like to personally thank them for all that they have done.”

Danni Hewson, head of financial analysis at AJ Bell, said: "Banks play a crucial role in making the country tick.

"They are trusted with our hard-earned cash and relied upon to fund the myriad of purchases from buying a house to business expansion which delivers jobs and prosperity.

"With that in mind it now seems absurd that the board of NatWest had considered that Alison Rose could ride out this storm."

The scandal emerged after Nigel Farage obtained evidence from Coutts through a data request that contradicted a BBC News story, which claimed that the account closure was due to Farage’s failure to meet a £1million borrowing requirement.

The BBC and its business editor Simon Jack subsequently apologised, adding the reporting had been based on information from a “trusted and senior source”, but it turned out to be “incomplete and inaccurate”.

Farage has called for the NatWest board to resign en masse in order to “overhaul” the culture at the bank.