NatWest ditches EY as auditor in blow to firm’s radical break-up plan
EY is set to lose its £40mn-a-year role auditing NatWest to its rival PwC in a blow to the Big Four accountant’s attempt to win support for its plan for a radical break-up of its audit and consulting businesses.
NatWest will drop EY after a competitive tender process that has run since June, five people briefed on the decision told the Financial Times. The changeover could be announced as soon as Friday morning alongside the bank’s quarterly results, three of these people added.
The decision, likely to be worth about £400mn over 10 years, comes as EY’s senior bosses aim to convince clients, regulators and their own partners that the firm will still be able win big audit mandates and robustly inspect companies’ accounts if it goes ahead with a plan to spin off its consulting business. EY’s partners are set to vote on the proposal in the coming months.
EY, which audits 24 of the FTSE 100 and five of the UK’s nine largest banks, won the audit of PwC client Aviva in a competition run last year before its break-up plan was revealed. It won a role auditing French bank BNP Paribas in the weeks after its break-up plan became public.
EY’s global bosses announced last month that they planned to press ahead with a once-in-a-generation break-up of the firm. The move will create a standalone consulting company and a separate audit-dominated firm that would retain some specialists to support auditors’ work in areas such as asset valuation and tax.
This story originally appeared on: Financial Times - Author:Siddharth Venkataramakrishnan
