Coutts, the bank patronised by members of the royal family, faces accusations of exacerbating the UK's challenges by relocating nearly £2 billion of client funds from the London stock market to overseas investments.
The private bank, catering to tens of thousands of affluent clients, is significantly reducing the allocation to UK shares in six pivotal client funds. This reduction will range from as much as 40 per cent to between 1.9 and 3.5 per cent, contingent upon the specific fund.
The move could be seen as an embarrassment to the Treasury, which still owns 28 per cent of Coutts’s parent bank, NatWest, and has been a cheerleader in pushing investors to allocate more money to UK stocks.
In a message to clients published on its website, Coutts described its current portfolio balance as "somewhat outdated" and announced a shift towards "a more global approach." The bank emphasised that clients would gain from enhanced diversification and expanded investment opportunities. Additionally, it stated that future transaction costs would decrease.
Charles Hall, head of research at Peel Hunt, the broker, said the move by Coutts amounted to a £1.96 billion switch out of the UK and was “very material” in terms of the run rate for outflows out of UK funds. These outflows amounted to £8 billion for the whole of last year, according to figures from Calastone.
