Natwest: Inconsistent Farage report will only make things worse for Rose and the bank
Natwest is in a pickle over the handling of Nigel Farage’s debanking. If boss class hoped the review by law firm Travers Smith, published this morning, would help, they’re in for a surprise.
Nigel Farage has called the report a “whitewash” and whilst the report does acknowledge “serious failings” it is certainly far from damning.
There are two vital conclusions that will hang around Natwest’s neck.
The first is the conclusion that Nigel Farage was in fact solely debanked for financial reasons, rather than reputational.
That does not pass the sniff test knowing what we now know about internal conversations Coutts staff were having about their relationship with the former UKIP leader and Brexit-backing politician.
We know, for instance, that the bank’s wealth reputation risk committee concluded that Farage’s “EC [economic contribution] is now sufficient to retain on a commercial basis.”
We also know that that same committee concluded “the committee did not think continuing to bank NF [Nigel Farage] was compatible with Coutts given his publicly stated views that were at odds with our position as an inclusive organisation.”
How does that scan with the conclusion in the Travers Smith report today that “reputational risk, and non-alignment with Purpose (and any associated reputational risk), were not, in Travers Smith’s view, factors that drove the Exit Decision”?
It is worth noting, perhaps, that Travers Smith do say that the evidence here “was not entirely consistent” and footnote at least one of their conclusions in this section with the proviso (or potential arse-covering-in-future, if you’re feeling less polite) that “the conclusions are based on the facts known to them as at the date of the Review 1 Report. However, (Travers Smith) cannot rule out the possibility that further facts may come to light as part of Review 3 that may change, or at least mean they need to revisit, some of their Review 1 conclusions.”
Certainly, the internal gloating messages between Coutts staff which Farage revealed this week via another subject access request – including a reference to the Brexit-backing politician as a ‘sketchy crackpot’ – do not give a picture of a bank making a clear-eyed commercial decision.
Secondly, Dame Alison Rose is given something of a pass.
Whilst the report’s authors acknowledge that she “probably” broke GDPR laws in discussing Nigel Farage’s finances, she is described as making an “honest mistake” in imparting information that she thought was in the public domain to a BBC journalist.
At issue here is whether the public at large knew that Farage had been debanked by Coutts. The report’s conclusion:
“Her disclosure of certain of the information was an honest mistake as to the applicable law combined with an honest misapprehension that those were, at the relevant time, matters of public record confirmed
by the Client, but she did not check the position before starting a risky conversation with a journalist. She honestly, but incorrectly, believed that the Client had publicly confirmed that he was a customer of Coutts.”
A SORRY MESS AT NATWEST
If this is true, either the bank’s internal processes were so lacking that the CEO was not made aware of the implications of a series of news stories running on the front pages of most national newspapers, or Rose was not curious enough to find out. Neither leave Natwest or Rose with much credit.
But it simply beggars belief that the disclosure of any confidential information about any customer could be regarded as an “honest mistake.” If banking was a religion, its tablets of stone handed down from Mount SInai would have just one commandment: thou shalt not mouth off about your customers.
It is an absurd phrase to use in this context, and it is even more barking coming just a couple of days after the Information Commissioners Office confirmed that, yes, Rose broke data protection laws twice.
Natwest are now faced with a decision on Dame Alison Rose’s payout – and whether she is entitled to receive her long-term, unvested shares, amounting to somewhere in the region of £5m.
The board, if they have not made up their mind as of yet, now have to decide whether a CEO who has effectively been cleared by an internal report of deliberate misdeeds can have their moolah taken away due to a careless accident – potentially dragging the bank into a miserable legal row with its former boss, who is reported to be weighing up legal action.
Goodness me, what a mess Natwest has got itself into. It is hard to imagine a way in which it could have got worse. One might almost be able to forgive the botched dispatch of Alison Rose – remember, the bank announced it wanted to keep her in post only to reverse ferret on that after less than twelve hours – but it is going to take a work of quiet genius to get the bank out of the mess this report has left it in.
Sir Howard Davies is an able City veteran and has said all the right things today. He is stepping down as chair of Natwest next year. He must be counting down the days.
NB: This piece has been edited to include the word ‘solely’ in the fourth paragraph.