NatWest chair vows to stay on to provide ‘stability’ after Farage controversy
The NatWest chair, Sir Howard Davies, said he would stay in his post to give “stability” and ensure an “orderly transition” at the embattled bank, amid speculation that he could be the lender’s third boss to be ousted over the Nigel Farage bank account scandal.
The bank also revealed it had hired external lawyers to investigate the closure of Farage’s accounts at its private bank Coutts, and look into the information Dame Alison Rose shared with a BBC reporter that led to her shock resignation as chief executive in the early hours of Wednesday. Coutts’s chief executive, Peter Flavel, stepped down a day later.
Davies, who was already due to retire from his post in summer 2024, told journalists on Friday morning that the search for his successor would continue in a “completely normal” manner, despite the prime minister failing to publicly back him a day earlier.
“My intention is to continue to lead the board,” Davies said.
“My understanding is that we do have the support of our main shareholder and of the regulators, for us to continue to steer this bank forward,” he said, referring to the government’s 38.5% stake, a hangover from its 2008 state bailout.
“It’s important that there is some stability here in the bank, and that we maintain our progress. And eventually, of course, there will be an orderly succession both for me, and indeed, the new chairman will have to review the CEO position,” he said.
NatWest’s shares recovered some ground on Friday morning, rising 1.8%. That followed a 4.5% drop over the 48 hours after Rose’s departure, resulting in almost £1bn being wiped off the bank’s market value.
Davies stressed that neither he nor the board had any involvement in the two main issues underlying the scandal, namely the closure of Farage’s account at Coutts, and the discussion that Rose had with the BBC business editor, Simon Jack, regarding the former Ukip leader’s banking affairs.
He also defended the board for unanimously backing Rose on Tuesday afternoon, before being forced into a U-turn hours later after pressure from Downing Streett. “We believe that was a rational decision to make at the time. However, the political reaction to that was such that Alison and I then concluded, and the board supported the view, that her position was then untenable.”
Rose resigned after admitting she had discussed Farage’s bank accounts – which had been closed without explanation – with Jack, in an apparent breach of client confidentiality. The BBC story had said that, according to a source, Farage’s accounts were closed because he fell below Coutts’s financial threshold, which requires customers to hold at least £3m in savings or £1m in loans or investments.
But Farage subsequently obtained and revealed documents showing that, while he had been below the bank’s “commercial criteria” for some time, the decision to shut his accounts was also based on Coutts’s concerns that his “xenophobic, chauvinistic and racist views” posed a risk to the bank’s reputation.
Despite offering Farage a personal apology, and pledging to launch an independent review into the circumstances that led to the closure of his accounts, political pressures ultimately forced Rose to step down in the early hours of Wednesday morning. Rose’s temporary replacement, Paul Thwaite, ousted Coutts’s chief executive, Peter Flavel, on Thursday afternoon.
Davies confirmed on Friday that NatWest had appointed the law firm Travers Smith to independently investigate its handling of the Farage affair.
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The review will have three aims: to check how Farage’s accounts at Coutts were closed; why they were shut down; and how such a controversial set of statements about his political views and actions was compiled. It will also look at how the bank communicated with him about his accounts and their closure.
The investigation is also expected to examine the “timing and content” of updates about Farage’s accounts between Coutts and Natwest group level – suggesting this could include memos or briefings from Flavel to Rose.
One of its more sensitive tasks will be to put a spotlight on the circumstances and nature of any leaks to the press, and what confidential information may have been passed from the bank’s leaders to the media, including the BBC.
Beyond the handling of Farage’s accounts, the investigation will look at all accounts closed at Coutts over the past 24 months. It will follow a similar approach to the Farage-specific investigation: looking at questions of how, why and what was said to all other customers whose accounts were shut down.
Davies said the bank would start making decisions on pay for Rose and Flavel – which could involve docking their pay packages – after the independent review concluded.