NatWest CEO Alison Rose at the bank's headquarters in London, on March 21.POOL/Reuters
Brexit crusader Nigel Farage gained notoriety for leading the charge to take Britain out of the European Union. The bombastic ex-politician has now forced the boss of one of Britain’s largest banks to resign, after he was dropped as a client because of his views on Brexit and other issues.
Mr. Farage has been battling NatWest Group PLC for weeks over a decision by its private banking arm, Coutts & Co., to close his accounts in June. Coutts officials told him the decision was based on commercial reasons, but they offered no details.
When Mr. Farage, who is now a television host, went public with the bank’s move and demanded a further explanation, NatWest’s chief executive, Alison Rose, leaked information to the BBC suggesting that Mr. Farage was no longer wealthy enough to have an account at Coutts.
Last week Mr. Farage obtained an internal Coutts report that revealed the bank’s “wealth reputational risk committee” had concluded his accounts should be closed because his opinions “do not align with our values.”
Ms. Rose resigned early Wednesday morning after confirming that she had been the source of the BBC story. “I recognize that in my conversations with Simon Jack of the BBC, I made a serious error of judgment in discussing Mr. Farage’s relationship with the bank,” she said in a statement, naming the news organization’s business editor.
Ms. Rose insisted that she was unaware of the committee’s report and that she had been told by Coutts’s executives that the accounts had been closed for commercial reasons. “I have apologized to Mr. Farage for the deeply inappropriate language contained in those papers,” she said.
Mr. Farage welcomed Ms. Rose’s departure, but he called on NatWest’s board to resign as well. He added that he’d heard from many other people who have been “de-banked” because of their opinions.
“I think the problem here is that there is a culture that has overtaken the banking industry where they have gone way beyond being banks. They have now taken a whole series of political stances and it would appear they want to be moral arbiters,” he said.
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The saga has raised questions about how banks approve customers and how far they must go in assessing public figures who could be open to corruption.
Under British law, everyone has a legal right to a basic bank account, and financial institutions cannot discriminate on race, gender or political grounds. However, regulations introduced in 2017 require banks to perform extra due diligence on “politically exposed persons,” or PEPs. These are generally considered people who hold prominent positions and who could be susceptible to bribery or corruption.
There have been concerns that some banks have gone too far and imposed excessive requirements on PEPs and their families.
The Coutts report on Mr. Farage ran 40 pages and provided a detailed overview of his statements on dozens of topics including the Black Lives Matter movement, net-zero targets, LGBTQ rights and Russia. The committee acknowledged that Mr. Farage had never faced any criminal allegations or sanctions and had no ties to Russia. It also confirmed that he’d been a loyal customer for more than 30 years and that his relationship with Coutts had always been professional.
Nonetheless, the committee found “that many of the behaviours demonstrated by NF do not align with our values and that there are reputational risks to the bank in being associated with him.” As a result, the bank approved an “exit decision” to close his accounts.
NatWest is among the four largest banks in Britain, with £720-billion ($1.23-trillion) in assets and 19 million customers. It is 39 per cent owned by the government, stemming from a £20-billion bailout the bank received in 2008 when it was known as Royal Bank of Scotland, or RBS.
The bank’s conduct regarding Mr. Farage sparked criticism from Prime Minister Rishi Sunak and other cabinet ministers.
“It is right that the NatWest CEO has resigned,” said Andrew Griffith, who is Economic Secretary to the Treasury and the City Minister, a liaison role between the financial sector and the government. “This would never have happened if NatWest had not taken it upon itself to withdraw a bank account due to someone’s lawful political views. That was and is always unacceptable.”
On Wednesday, Mr. Griffith met with executives from the banking industry to discuss PEPs. Treasury officials said after the meeting that the executives had committed to the principle of non-discrimination based on lawful freedom of expression. They have also agreed to give customers a 90-day notice before closing accounts and spell out the reasons for the decision.
The controversy ends a stellar career for Ms. Rose, 53, who had been one the most powerful women in U.K. banking.
She started as a trainee at RBS in 1992 after graduating from Durham University and rose through the ranks to become CEO in 2019. She was the first female boss at one of Britain’s big four banks and she was a member of Mr. Sunak’s business advisory council.
Ms. Rose won plaudits for stabilizing the bank, which she renamed NatWest, and for transitioning it away from government ownership, which has fallen from 62 per cent during her tenure.
Despite the scandal over Mr. Farage, the bank’s board stood by her for days and even released a statement Tuesday evening expressing “full confidence” in her as CEO.
In announcing her resignation Wednesday morning, board chair Howard Davies called it a “sad moment.” Ms. Rose “has dedicated all her working life so far to NatWest and will leave many colleagues who respect and admire her,” he said.