NatWest/Farage: banks cannot choose customers for their politics

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Ambitious NatWest once stood tall in the City, as occupant of London’s first modern skyscraper. The bank has a humbler mien today. A spat with Nigel Farage reflects poorly on the UK lender. Private bank Coutts, which is owned by NatWest, closed the account of the former pro-Brexit party leader without his consent.

NatWest boss Alison Rose has apologised. The episode still calls her judgment and oversight into question.

NatWest had represented the closure of Farage’s Coutts account as an essentially commercial decision. The value of his mortgage had fallen below its £1mn borrowing threshold.

The former politician claims he was ejected mainly because of his right-of-centre opinions. That is apparently confirmed by extracts from internal bank documents. These use some unfortunate language.

Banks are obliged to review dealings with “politically-exposed persons”. But this is a part of anti-corruption regulations. It is not an opportunity for bankers to punish public figures for views they find objectionable.

European retail banks are quasi-public utilities. The state has supported NatWest since the 2008 financial crisis and still owns about 39 per cent. It needs good reasons to deny services to any Briton.

In an earlier flub, Rose attempted to avoid a grilling from a Treasury select committee hearing. She later reversed her decision.

Running a big bank requires a thick skin and political savvy. Charlie Nunn of Lloyds and Santander’s Ana Patricia Botín have both attributes. Rose’s credentials now look rather weaker.

In fairness to Rose, Farage was offered an ordinary NatWest account. The full text of bank documents might show Coutts in a better light.

Bank chief executives have weathered worse scandals. But an uncomfortable Catch-22 applies to all bosses concerning errors by subordinates, in Rose’s case including Coutts chief executive Peter Flavel. Either they consented to it. Or they were not aware of it, and should have been.

The Lex team is interested in hearing more from readers. Please tell us what you think of the row over the Farage account in the comments section below