Coutts plans to move £2bn of clients' cash out of London stock market
Elite private bank Coutts has said it wants to take an estimated £2billion of clients’ funds out of the London stock market and put it into foreign company shares.
The royal bank, which is almost 30 per cent owned by taxpayers, said its ‘home bias’ towards UK shares was an ‘anachronism’ requiring ‘fundamental change’.
The move is another blow for the City and also risks the spotlight being put back on Coutts after the infamous ‘debanking’ row with politician Nigel Farage in July 2023.
Speaking at a Coutts in Conversation event earlier this week, the bank’s chief investment officer Fahad Kamal said: ‘Currently, about 20 per cent of a standard balanced portfolio here is UK stocks, which is something of an anachronism.
‘It would be closer to 3 per cent or 4 per cent if it were more commensurate with the proportion of UK stocks in global stock markets. So this is a recalibration.’
He added that the firm would be ‘adjusting our compass accordingly’, with the cash shifted from six Coutts UK equity and bond funds to more world-focused schemes.
An extraordinary row between politician Nigel Farage (pictured) and NatWest broke out last summer after his account with Coutts – which is owned by the lender – was closed
Former NatWest chief executive Alison Rose (pictured) was forced to quit after admitting to telling a BBC journalist that Nigel Farage’s account was shut down for commercial reasons
According to the Evening Standard, Mr Kamal said while the UK market had hardly changed in a century, many companies in the US did not even exist 20 years ago.
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And his colleague, multi-asset strategist David Broomfield, added: ‘To get access to the widest and best opportunity set, we need to be part of global equities.’
It comes after an extraordinary row between Mr Farage and NatWest broke out last summer after his account with Coutts – which is owned by the lender – was closed.
Former NatWest chief executive Alison Rose was forced to quit after admitting to telling a BBC journalist that the former Ukip leader’s account was shut down for commercial reasons.
However, internal reports showed that Mr Farage’s political leanings had been a factor in the decision.
The leading Brexiteer branded an investigation into the closure a ‘whitewash’ and later said his battle with NatWest was ‘far from over’.
The scandal raised serious questions over the industry’s policies on closing bank accounts.
Coutts – which is owned by NatWest – is still almost 30 per cent owned by the taxpayer
Nigel Farage previously said that his battle with NatWest (pictured) was ‘far from over’
Data released by the Financial Services Ombudsman last month showed Britons made 4,000 complaints about debanking in the 2023/24 year.
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A Coutts spokeswoman told the Standard today: ‘We retain significant investment in the UK and our investment strategy is to achieve the best returns for our clients in the most attractive markets.
‘We closely follow the performance of all markets in line with our individual client needs and our House Views are subject to constant review.’
During the Budget in March, Chancellor Jeremy Hunt announced the introduction of a new British ISA to encourage investment in UK companies and boost the City.
The new savings account will give people an additional £5,000 tax-free allowance to invest in UK assets, on top of the existing £20,000 limit.
Mr Hunt said he had received calls from more than 200 City representatives to reform the ISA system and encourage more people to invest in UK assets.
It forms part of plans to revive the UK’s stock market, which has faced an exodus of listed companies moving to international peers and a dearth of new companies choosing to float in London.
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