‘Serious failings’ in decision to close Nigel Farage account, review finds
An independent review into the closure of Nigel Farage’s Coutts account and the discussion of his banking with a journalist by the head of the bank has found “a number of shortcomings” in the closure process.
But law firm Travers Smith, which was commissioned by the board of NatWest to conduct the review, said the closure of Mr Farage‘s account, “was predominantly a commercial decision”.
“Coutts considered its relationship with Mr Farage to be commercially unviable because it was significantly lossmaking,” the review found.
In response to the key findings of the report, NatWest chairman Sir Howard Davies, said “a number of serious failings” were set out in the treatment of Mr Farage.
Shortcomings were also found in how the bank, which owns Coutts, communicated with the former UKIP and Brexit Party leader and how it treated his confidential information, according to the review.
The Financial Conduct Authority (FCA) said potential “regulatory breaches and a number of areas for improvement” were identified.
These include NatWest’s processes on how it considers potential account closures and customer complaints as well as the effectiveness of governance mechanisms.
NatWest’s share price fell to 173p on Friday – its lowest in more than two years. This came despite just published results showing £1.33bn in profit over the three months ending in September, 23% higher than at the same point a year before.
The share price fall, from 205.2p on Thursday evening, was the biggest fall since the 2016 Brexit vote.
Former chief executive Dame Alison Rose left the state-backed lender after she admitted making a “serious error of judgment” by speaking to a journalist about Farage’s banking at Coutts.
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Nigel Farage has criticised the review and accused the law firm Travers Smith of being ‘not independent’.
After the news piece was published Mr Farage released the findings of a subject access request, which suggested the move was taken partly because his views did not align with the firm’s “values”.
Key findings by Travers Smith are:
• The decision to close the account was lawful and was made in accordance with bank policies and processes.
• Dame Alison Rose played no part in the decision to close the account.
• Other factors were considered in the decision-making process: Coutts thought there could be reputational harm from Mr Farage holding an account, though these factors did not drive the decision.
• Mr Farage’s stated beliefs were not a determining factor in closing the account but those beliefs did support the decision.
• The way Mr Farage was informed of the closure of his account did not accord with the bank’s policies and processes, in particular when it came to giving reasons to customers involved in “non-financial crime exits”. No adequate reasons were given.
In response, Mr Farage said: “The report’s authors claim it was “predominantly a commercial decision” to close my accounts but, crucially, they also noted that evidence given to them by witnesses in relation to this episode was not entirely consistent.
“Travers Smith has taken a very mealy-mouthed approach to this complex issue. The law firm argues that my political views “not aligning with those of the bank” was not in itself a political decision. This is laughable.”
“Worse still, Travers Smith did not find “any evidence” that my “pro-Brexit stance were factors in the exit decision”. The word Brexit appeared no less than 86 times in my subject access request.
“The letters that were sent to me confirming the closures of my accounts without explanation were sent on a paper headed template usually reserved for those suspected of fraud.”
The Information Commissioner’s Office (ICO) earlier this week said there were two privacy breaches involved in Dame Alison’s disclosure to BBC News business editor Simon Jack.
A broader FCA review of banks closing accounts on the basis of customers’ political opinion found no evidence of the practice.
However, only closures between July 2022 and June 2023 were considered and more work to verify the data supplied by banks was needed as was examination as to why and when they close accounts due to reputational risk.
‘Minimal’
“Both Travers Smith and the Information Commissioner’s Office (ICO) have concluded that I inadvertently confirmed what had already been widely reported, that Mr Farage held an account at Coutts,” Dame Alison said on Friday morning.
“The ICO also concluded the ‘impact around this specific disclosure was minimal’.”
“Travers Smith is clear that “there was no leak of specific detailed financial information”. Travers Smith also confirmed I knew nothing about the comments made by Coutts staff about Mr Farage, which were deeply unpleasant and unfair.”
The head of the UK’s biggest mortgage lender has said he expects two more interest rate cuts this year, making borrowing cheaper.
Chief executive of Lloyds Banking Group Charlie Nunn told Sky News he expected the Bank of England to make the cuts two more times before 2026, likely bringing the base interest rate to 3.75%.
Two cuts are currently anticipated by investors, the first of which is due to be a 0.25 percentage point reduction next month.
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The banking group owns Halifax and Bank of Scotland, making it the biggest provider of mortgages.
Mr Nunn also forecast house price growth of between 2 and 3%.
“We helped 34,000 first-time buyers in the first half [of the year] alone, 64,000 last year. And of course, it was driven by the stamp duty changes in Q1 [the first three months of the year]. So Q2 [the second three months] was a bit slower, but we continue to see real strength in customers wanting to buy homes and take mortgages. So we think that will continue,” he said.
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Expect two more rate cuts this year, says Lloyds boss
It comes as the bank reported higher profits than City of London analysts had expected.
Half-yearly profit at the lender reached £3.5bn as people borrowed and deposited more.
The bank has benefited from high interest rates, set at 4.25% by the Bank of England to control inflation, which have made borrowing more expensive for households and businesses.
Over the last six months, the difference between what Lloyds earns on loans and what it pays out rose.
Mr Nunn told Sky News the profits were due to increased market share in mortgages and small business lending, as well as productivity improvements.
Despite this, Mr Nunn warned the chancellor against raising taxes on financial services, saying it was one of the highest taxed in the world.
Chancellor Rachel Reeves is expected to announce tax rises in the autumn as her vow to bring down debt has come under pressure due to the rising cost of borrowing and government spending U-turns.
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