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NatWest’s share price is under scrutiny today following the launch of a criminal investigation by the Financial Conduct Authority (FCA). NatWest, formerly known as Royal Bank of Scotland (RBS), is one of the largest banks in the UK.
The investigation stems from allegations by the FCA that the bank failed to comply with money laundering laws between 2011 and 2016. The case involves an undisclosed UK customer who conducted transactions totaling more than £365 million through the bank.
The FCA claims that NatWest did not thoroughly investigate the source of these funds. The case is scheduled to be heard on April 14th this year. If found guilty, the bank, which is 62% owned by taxpayers, could face substantial fines.
This isn’t the first time NatWest has faced significant penalties. In 2018, the bank paid more than $4.9 billion to the U.S. Department of Justice for its actions during the Global Financial Crisis (GFC).
Following a recent rally, NatWest’s share price declined by more than 1% today. Despite this drop, the stock remains 30% above its lowest level in January. It is currently positioned slightly above the lower boundary of the ascending channel and is hovering around the 25-day and 15-day weighted moving averages. Despite today’s decline, I expect the shares to recover as bulls aim for the upper side of the channel at 193p. However, if the stock falls below 184p, this bullish trend could be invalidated.