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NatWest admitted to “serious failings” in the way its private bank Coutts treated Nigel Farage when it closed his account, and promised “substantive changes” to its procedures after the conclusion of a review by a law firm.
The UK lender on Friday published a report by Travers Smith, which found that while the decision to cut off Farage as a client was primarily commercial and therefore lawful and in line with its policies, it failed to communicate the decision properly and then mishandled his complaint.
The probe also determined that former chief executive Dame Alison Rose gave a BBC journalist confidential information about Farage, in a move that “probably” broke data protection laws and may also have breached regulatory rules. The Financial Conduct Authority separately announced its own probe into the matter.
“Coutts failed to pay due regard to the interests of Mr Farage and failed to treat him fairly in the round,” the report concluded. Travers Smith said it reviewed 3.7mn documents and interviewed 28 staff involved.
“This report sets out a number of serious failings in the treatment of Mr Farage,” said NatWest chair Sir Howard Davies. “Although Travers Smith confirm the lawful basis for the exit decision, the findings set out clear shortcomings in how it was reached as well as failures in how we communicated with him and in relation to client confidentiality.
“We apologise once again to Mr Farage for how he has been treated.”
The findings of the investigation came alongside a disappointing set of third-quarter results for NatWest, as profit missed expectations and it reduced its guidance for lending margins in a signal that the benefits from higher interest rates have peaked. The shares tumbled almost 17 per cent in early London trading.
The Farage scandal erupted in July when the former leader of the UK Independence and Brexit parties demanded the resignation of Rose after he claimed he was “debanked” from the prestigious wealth manager for his political views.
NatWest initially insisted that the decision was purely commercial. However, Farage obtained internal documents from Coutts that showed its reputational risk committee had accused him of “pandering to racists” and being a “disingenuous grifter”. It concluded that his politics were “at odds with our position as an inclusive organisation”.
Rose then compounded the issue by speaking to a BBC reporter about the scandal, misleading the organisation into writing a story that said Farage’s politics played no part in the process.
The chief executive stepped down later that month. Former Coutts’s chief executive Peter Flavel also left the bank.
“On balance, the exit decision was predominantly a commercial decision. Coutts considered its relationship with Mr Farage to be commercially unviable because it was significantly lossmaking,” Travers Smith said. However, it did find that “the risk Coutts perceived to its reputation in the eyes of its stakeholders” was a supporting factor, but that it was not what drove the decision.
NatWest said it would implement all recommendations made in the report, most notably ensuring that “the lawfully protected beliefs or opinions of customers do not play any role in exit, retention or onboarding decisions”.
It will also review its treatment of politically exposed persons, which are subject to enhanced scrutiny and often find it more difficult to access banking services as a result.
In a post on X, formerly Twitter, on Friday, Farage said that the investigation by Travers Smith had “whitewashed” NatWest’s decision to close his account.
The board has not yet reached a decision on whether Rose will receive any of her pay for 2023 and said that it would “disclose the relevant outcomes, as soon as possible”.
Before her departure, she would have been eligible for a maximum package of £5.3mn, including £2.4mn in salary and fixed share awards and up to £2.9mn in variable pay. She also holds 2.6mn unvested shares worth about £5.4mn. Rose declined to comment on Friday.
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