- By Michael Race
- Business reporter, BBC News
“Serious failings” were made by NatWest in its treatment of Nigel Farage when it closed down his Coutts bank account, an independent review has found.
It said the bank failed to communicate its decision properly and also found shortcomings in how it treated Mr Farage’s confidential information.
But the closure was lawful, and based mainly on commercial reasons, it said.
Mr Farage said the review was a “whitewash” and described the findings as “laughable”.
He accused the law firm Travers Smith, which conducted the investigation, of having taken a “mealy-mouthed approach to this complex issue”.
Mr Farage, a prominent Brexiteer, said earlier this year that Coutts, the prestigious private bank for the wealthy and owned by NatWest, planned to shut down his account and that he had not been given a reason.
However, the politician later obtained a report from the Bank which indicated his political views were also considered.
Travers Smith concluded the decision to close Mr Farage’s Coutts account was “predominantly a commercial decision” and said the bank “considered its relationship with Mr Farage to be commercially unviable because it was significantly loss-making”.
It said other factors were considered including Coutts’ reputation with customers, staff and investors due to Mr Farage’s public statements on issues such as the environment, race, gender and migration.
Travers Smith said these public views were not a determining factor in closing his Coutts account, but they did “consider them to have supported the decision”.
It also said a decision taken in May 2022 to continue classifying Mr Farage as a Politically Exposed Person or PEP was “incorrect”.
Someone classed as a PEP generally presents a higher risk for financial institutions as they are deemed to be more exposed to potential involvement in bribery and corruption by virtue of their position and the influence they may hold. As a result, banks are required to do extra due diligence on them.
NatWest, which is 39% owned by the taxpayer, apologised for the “unacceptable failures”.
The bank’s shares plunged almost 18% in early trading, marking their biggest drop since the Brexit vote in 2016, which analysts linked to its latest results, released at the same time as the report.
Sir Howard Davies, NatWest Group chairman, said although the investigation confirmed “the lawful basis for the exit decision, the findings set out clear shortcomings in how it was reached as well as failures in how we communicated with him and in relation to client confidentiality”.
“We apologise once again to Mr Farage for how he has been treated. His experience fell short of the standards that any customer should expect,” he added.
Travers Smith said Dame Alison’s disclosures about Mr Farage “probably amounted” to a personal data breach, but added she “honestly, but incorrectly, believed that the client [Mr Farage] had publicly confirmed that he was a customer of Coutts”.
Mr Farage told the BBC’s Today programme that Dame Alison was “given a chance” to correct her error prior to information being made public but that “she didn’t”.
The financial watchdog, the Financial Conduct Authority, which regulates banks, said the review highlighted potential regulatory breaches and said it was investigating both NatWest and Coutts.
As well as Dame Alison, the boss of Coutts, Peter Flavel, also resigned as a result of events.
In response to Friday’s report, Dame Alison said that the review had “concluded that I inadvertently confirmed what had already been widely reported, that Mr Farage held an account at Coutts”.
“Travers Smith is clear that ‘there was no leak of specific detailed financial information’,” he added. “Travers Smith also confirmed I knew nothing about the comments made by Coutts staff about Mr Farage, which were deeply unpleasant and unfair.”
NatWest said it was taking several steps including one to to ensure “lawfully protected beliefs or opinions of customers do not play any role” in bank account closures.
“Our job now is to make sure that does not happen again,” added Sir Howard.