Coutts withdraws £2bn from London Stock Market

The Royal Family’s bank is planning to invest abroad in order to achieve the best returns.

King’s Bank is the latest to hit the London Stock Exchange with a hammer.

Coutts, the bank that serves the Royal Family and operates an ATM at Buckingham Palace has announced its plans to invest abroad and move away from UK shares.

Coutts is selling £1,96bn worth of British stocks to invest the money in other regions.

Coutts stated that the changes will help “achieve best returns for clients in the most appealing markets”.

Another blow to the market has been dealt by the decision of one of Britain’s largest banks to abandon the London Stock Exchange.

London has seen a lack of listings in recent months and an exiting trend as companies have been taken over or moved to more favourable exchanges in Europe or the US. Goldman Sachs reported last week that the London Stock Exchange has been shrinking at a record pace.

Charles Hall, an expert at the stockbroker Peel Hunt said Coutts decision should be “a call to arms” to the Government for them to shake up policy.

He said: “It’s not good for the UK, but it may be great for the fund.” We allow capital invested in the UK, to be used for overseas investments. This is why our company valuations are low.

“We have a very laissez-faire approach in our capital markets as a nation, and this has now turned into a major problem.”

Mr Hall also added that Coutts’ withdrawal of the funds was not “unpatriotic”.

“They are not paid to be patriots.” Coutts wants to give people a performance.

“It is a reflection of the current situation and a call for arms from the government.”

Neil Shah, executive director of Edison Group, said: “Coutts decision is more that just another blow to the City.” This decision could serve as a much-needed warning to the government to act.

Chancellor Jeremy Hunt made improving London’s stock exchange a priority, and announced reforms to boost the London market in December 2022 as part of the Edinburgh Reforms.

The reforms are not enough to stop the decline in the market.

Coutts manages around £10bn in funds. A spokesperson said: “We maintain significant investment in the UK, and our investment strategies are to achieve the highest returns for our customers in the most appealing markets.

Our House Views undergo constant revision. We closely monitor the performance of each market in accordance with our clients’ individual needs.

Coutts, which is owned by NatWest, is therefore partly owned by taxpayers. NatWest is owned by the Government, which holds a 29,8pc stake.

Coutts became the center of the Debanking Crisis at NatWest when the private bank closed the account of Reform UK President Nigel Farage, a broadcaster. Coutts employees had criticized Mr Farage’s views on politics before closing his account.

The incident led to a major crisis within NatWest, and the departure of Dame Alison Rose as chief executive.