Dear Nigel Farage, you can keep your Coutts account

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Nigel Farage, the Brexit-backing politician, this week released a memo from Coutts, the UK private bank, suggesting it dropped him as a customer more because it abhorred his views than because he had failed its financial criteria. Farage then condemned this as “the march of woke corporatism”.

Rishi Sunak, prime minister, has pledged to crack down on banks denying services based on “lawful free speech” and Alison Rose, chief executive of Coutts’ parent bank NatWest, has apologised. Both say they want banks to be more transparent with customers, so here is the new, more honest letter that Peter Flavel, Coutts chief executive, should send to Farage:

Dear Nigel,

I write to reverse our earlier decision to close your accounts at Coutts on the basis that your rabble-rousing views are “at odds with our position as an inclusive organisation”. As one of Britain’s oldest private banks, we aim to attract customers who are enterprising and successful and you have enterprisingly and successfully made us look like idiots. So we want you back.

You may have noted that in the 40-page document justifying our actions, we called it “not a political decision, but one centred around inclusivity and purpose”. That was disingenuous. You are a politician and what we called your “xenophobic, chauvinist and racist” rhetoric is patently political. We were trying not to admit it for legal reasons.

Nikhil Rathi, chief executive of the Financial Conduct Authority, has pointed out that “the law is clear”. Banks cannot discriminate against payment account customers, including you, based on their political or other opinions. The 2015 payment regulations referred to the EU charter of fundamental rights and you are still protected by them, despite your dislike of the EU. Ironic, isn’t it?

Anyway, although we corporately support Pride and other progressive causes, our effort to ditch you was not really about that. A wealth manager that only tolerated liberal-minded customers would not last long. Quite a few potential clients with more than our requisite £3mn in assets hold beliefs that make our employees shudder.

Take Novak Djokovic. Our dossier recorded among your “adverse press” your support for the tennis player last year before he was deported from Australia for not being vaccinated. Djokovic is a controversial figure, but he is also very wealthy and we would not hesitate to roll out the red carpet if he applied for a Coutts account.

The real problem is that you have not been worth the hassle: as we bankers put it, your risk-adjusted return is too low. Not only have you been a marginal customer, but the media discovered in 2019 that you had a Coutts mortgage, so banking secrecy was not enough to shield our reputation. You adore controversy but banks like to keep a low profile, from bitter experience.

It needs a lot of effort to oversee your accounts because you are a Politically Exposed Person (PEP). Politicians, senior judges and public servants count as PEPs who are at risk of being bribed and must be monitored tightly under money laundering laws. Such regulations apply around the world, so I guess you’d say the globalists have won.

Politicians earn little compared with the high net worth individuals whom we covet: you once described yourself as “skint”. If large sums of money turn up suddenly in their accounts, we must find out why, or risk being fined by the FCA for not having adequate controls. They can be worth cultivating because they will make more later, like students, but that’s another story.

When politicians apply, we run their names through a database such as Refinitiv’s World-Check to check if they are listed by law enforcement agencies or attract negative press (the latter is why your file is so thick). Believe me, banks spurn foreign PEPs for vague reputational reasons all the time. The rejects often hire lawyers, but there is usually not much they can do.

In your case, we were careless. Having checked reports relating to Russia, we concluded you had not been sanctioned and there was no evidence of you having received bribes. But we still felt uncomfortable about you, and your mortgage was due to end. The risk committee could have left it at that, but instead started musing about our corporate values. This was foolish.

In view of the reputational crisis we now face, we have decided to retain you as a customer after all: you are officially being de-debanked. We hope this will help to dissuade the government from pressuring banks to open accounts for all domestic PEPs, while blaming us if they are misused. Politicians can be tricky customers, as you know.

You are also in the happy position of ceasing to be a PEP next year, since you have not won an election recently. This makes it easier: all you need do for us to reopen your Coutts account is to meet our financial criteria. If you are unable to, NatWest is offering you facilities instead. You might even feel more at home with the ordinary folk.

Yours sincerely, Peter Flavel

john.gapper@ft.com