Closure of Nigel Farage’s bank account ‘predominantly a commercial decision’, review finds

Published

11 months ago

October 27, 2023

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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.

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.”

Business

Labour lures BlackRock chief Fink to flagship investment summit

Published

2 hours ago

September 21, 2024

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Labour lures BlackRock chief Fink to flagship investment summit

The boss of BlackRock, the world’s largest asset manager, will attend the new government’s flagship investment summit next month amid suggestions it is struggling to attract large numbers of high-calibre international business figures.

Sky News has learnt that Larry Fink, BlackRock’s chairman and chief executive, will attend the 14 October gathering, which will be held at a prominent central London venue.

Mr Fink, who was also present at a similar event organised by the Conservatives in 2021, will be among the most influential global bosses to attend.

Among the others who have agreed to come are Margherita della Valle, the Vodafone chief executive, Hemant Taneja, CEO of technology investor General Catalyst, and John Graham, who runs the Canada Pension Plan Investment Board, one of the world’s largest pension plans, Sky News understands.

David Solomon, boss of the Wall Street bank Goldman Sachs, will also be there.

The emergence of some of those attending comes as Labour battles suggestions that it will struggle to draw the 300 industry leaders it pledged in early August.

Sources said fewer than 150 companies had confirmed their bosses’ attendance, with just over three weeks until the event takes place.

Roughly 100 ministers, metro mayors, officials and other government-connected figures are also expected to be present.

One insider insisted this weekend that “quality is more important than quality” and said the government remained on track to have 300 people at the summit.

That figure may ultimately be reached but comprising both the government and private sector delegations.

They questioned, however, why a formal numerical target had been set publicly when the summit was being staged at such short notice.

“It’s made us a hostage to fortune,” said one.

The event, which Labour vowed during the general election campaign to hold within 100 days of coming to power, is being seen as a key test of its economic credibility.

Whitehall officials are keen to announce investment deals worth tens of billions of pounds on 14 October, although whether they will hit this target is unclear.

Some corporate bosses, including the heads of Blackstone and JP Morgan, have declined the invitation, citing diary commitments.

Those two companies are expected to send alternates to the event, with Blackstone being represented by Lionel Assant, one of its most senior private equity executives.

Until recently, the government had insisted that only CEOs would be able to attend, with their invitations not transferable, according to insiders.

Aviva, Barclays, BT Group and HSBC Holdings will be among the FTSE-100 companies represented by their CEOs.

The business secretary, Jonathan Reynolds, told the Financial Times this weekend that details of the government’s industrial strategy would be set out before the investment summit.

That is expected to include the appointment of a chair for its Industrial Strategy Council, although it faces going into the event without an investment minister being appointed.

The summit will also be politically delicate given that it comes just a fortnight before Rachel Reeves, the chancellor, delivers her first Budget – with higher taxes affecting many of those attending on October 14 expected to feature prominently.

The Department for Business and Trade declined to comment, while none of the companies contacted by Sky News would comment.

Business

Trio of property giants oppose Cineworld rent cuts plan

Published

22 hours ago

September 20, 2024

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Trio of property giants oppose Cineworld rent cuts plan

A trio of property giants has lodged a protest against a radical financial restructuring that will see Cineworld imposing steep rent cuts on its landlords.

Sky News has learnt that British Land, Landsec and Legal & General Investment Management all voted against the cinema operator’s restructuring plan this week.

Cineworld has confirmed plans to close six of its UK multiplexes, but documents circulated to creditors show almost 50 others are in categories requiring landlords to agree to revised rent deals in order to ensure their long-term viability.

Although they carry significant influence in the commercial property sector, the trio’s protest will have no impact on the outcome of the company’s proposals, since its owners are now also among its largest creditors, meaning they can effectively force the deal through.

According to documents sent to creditors during the summer, 33 sites – categorised as Class B – “require a reduction of rent to ERV [Estimated Rental Value] Rent in order to place the sites on a viable long-term footing”.

A further 38 of Cineworld’s cinemas would be unaffected, while another 16 Class C1 and C2 leases require reductions to either turnover rent or zero rent in order to render them financially viable.

The documents added that the company did not have sufficient funding to meet a quarterly rent bill on June 24 of £15.9m.

“The UK group did not have sufficient liquidity to make the June 2024 Rent Payment and required further funding from the US Group to meet this liquidity need.

“Absent this funding, the UK Group would have been insolvent on a cashflow basis.”

Cineworld is being advised by AlixPartners.

Other cinema operators are now poised to step in to take over some of Cineworld’s sites.

The company trades from more than 100 locations in Britain, including at the Picturehouse chain, and employs thousands of people.

Cineworld grew under the leadership of the Greidinger family into a global giant of the industry, acquiring chains including Regal in the US in 2018 and the British company of the same name four years earlier.

Its multibillion-dollar debt mountain led it into crisis, though, and forced the company into Chapter 11 bankruptcy protection in 2022.

It delisted from the London Stock Exchange last August, having seen its share price collapse amid fears for its survival.

Cineworld also operates in central and Eastern Europe, Israel and the US.

Business

Consumer confidence slumps following warnings of ‘tough choices’ in budget ahead

Published

1 day ago

September 20, 2024

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Consumer confidence slumps following warnings of 'tough choices' in budget ahead

A long-running measure of consumer confidence has slumped to levels last seen at the start of the year following warnings of “tough choices” ahead in the looming budget.

GfK’s Consumer Confidence Index fell seven points in September to minus 20, with significant drops in predictions for personal finances and the general economy over the coming year.

The report’s authors suggested it was “not encouraging news” for the new government, which has made growing the economy its top priority.

Money latest: Millions already buying mince pies ahead of Christmas

But within weeks of taking the post of chancellor, Rachel Reeves – followed by prime minister Sir Keir Starmer – moved to warn of a legacy £22bn “black hole” in the public finances and said it would result in a painful budget on 30 October.

Among measures already taken include cuts to winter fuel payments, leaving up to 10 million pensioners up to £300 worse off, and inflation-busting public sector pay settlements.

Tax rises and spending cuts are widely expected in next month’s statement to MPs though The Times reported on Friday that a decision by the Bank of England to slow a programme of loss-making bond sales would leave Ms Reeves £10bn better off than she had anticipated.

It added that she was still expected to push forward with her budget plans anyway as a signal of her commitment to fiscal discipline.

The latest snapshot on the public finances, released by the Office for National Statistics (ONS) on Friday showed net borrowing of £13.7bn during August.

Its chief economist, Grant Fitzner, said: “Borrowing was up by over £3bn last month on 2023’s figure, and was the third highest August borrowing on record.

“Central government tax receipts grew strongly, but this was outweighed by higher expenditure, largely driven by benefits uprating and higher spending on public services due to increased running costs and pay.”

Consumer spending accounts for around 60% of the UK economy.

Data released separately on Friday showed a 1% rise in retail sales volumes during August in the wake of weakness, mostly blamed on poor weather, over the previous couple of months.

The ONS said that the increase was driven by supermarket sales, as demand for BBQ food and drinks rose due to the arrival of some sunshine over the key holiday month.

It also credited discounting by clothing retailers.

The data chimes with the latest updates from big retailers, including Next and B&Q’s owner, which have spoken of weak demand for so-called big ticket items such as home furnishings and kitchens respectively.

GfK’s closely-watched survey showed expectations for the general economy over the next 12 months fell by 12 points to -27, while the forecast for personal finances was down nine points to -3.

Commenting on its key measures, including the headline figure, consumer insights director at GfK Neil Bellamy said: “These three measures are key forward-looking indicators so despite stable inflation and the prospect of further cuts in the base interest rate, this is not encouraging news for the UK’s new government.”

He added: “Strong consumer confidence matters because it underpins economic growth and is a significant driver of shoppers’ willingness to spend.

“Following the withdrawal of the winter fuel payments, and clear warnings of further difficult decisions to come on tax, spending and welfare, consumers are nervously awaiting the budget decisions on October 30.”