The head of the private bank Coutts has been pushed out, less than 48 hours after the shock departure of NatWest’s chief executive, Alison Rose, as the storm over the “mishandling” of Nigel Farage’s bank accounts continues.
Peter Flavel was asked to leave by NatWest’s interim chief executive, Paul Thwaite, who felt it was important to take action quickly, it is understood.
It came as questions continued to swirl about whether further heads could roll as a result of the scandal.
NatWest’s half-year financial results will be released on Friday morning, when bosses including the chair, Howard Davies, are expected to face pressure from investors and the media over the handling of the Farage accounts debacle.
Flavel has stepped down “by mutual consent with immediate effect”, according to a statement released by NatWest on Thursday afternoon. “I believe this is the right decision for Coutts and the wider group”, Thwaite said.
In his resignation statement, Flavel said: “In the handling of Mr Farage’s case we have fallen below the bank’s high standards of personal service. As CEO of Coutts it is right that I bear ultimate responsibility for this, which is why I am stepping down.”
Rose was forced to fall on her sword over a growing row that started after Coutts shut Farage’s bank accounts earlier this year.
Coutts came under further fire after Farage obtained documents showing that, while the former Ukip leader had for some time been below its commercial criteria – requiring customers to have £3m in savings or £1m in loans or investments – it was ultimately concerned that his alleged “xenophobic, chauvinistic and racist views” posed a risk to the bank’s reputation.
Rose departed in the early of Wednesday morning after admitting that she had discussed Farage’s case with a BBC reporter, in an apparent breach of client confidentiality.
NatWest Group, which includes Coutts, was rescued from collapse during the 2008 banking crisis with a £45.5bn government bailout, and the state is still its largest shareholder, with a 39% stake. The departures of Rose and now Flavel followed interventions by the chancellor and the prime minister, who made it clear they wanted change at the top of the UK’s fourth largest banking group.
“While I will be personally sorry to lose Peter as a colleague, I believe this is the right decision for Coutts and the wider group,” Thwaite said.
Flavel, 63, joined Coutts in 2016, having previously served as chief executive of JP Morgan’s private wealth division. He also worked at Standard Chartered for nine years, where he set up its global private bank in 2006.
While Flavel’s pay is not publicly disclosed, he is understood to have earned between £1.5m and £2m a year. It is not yet clear whether he will be entitled to a payout in light of his resignation. The outgoing private banking boss could see some of his pay docked once NatWest completes its independent review into the circumstances surrounding the closure of Farage’s accounts.
In a tweet sent minutes after Flavel’s departure was announced on Wednesday afternoon, Farage said: “It was only a matter of time before Peter Flavel, Coutts CEO, stood down. The ultimate responsibility for the dossier de-banking me for my political views lies with him. I even wrote to Mr Flavel twice before going public and didn’t receive an acknowledgment.”
It was only a matter of time before Peter Flavel, Coutts CEO, stood down.
— Nigel Farage (@Nigel_Farage) July 27, 2023
The ultimate responsibility for the dossier de-banking me for my political views lies with him.
I even wrote to Mr Flavel twice before going public and didn’t receive an acknowledgment.
NatWest said it had appointed Mohammad Kamal Syed, currently head of asset management, to take over from Flavel in the interim, as it searched for a permanent replacement.
Coutts accounts for £30bn of NatWest Group’s total assets, compared with £226bn across its retail banking arm.
Neville Hall, a risk and compliance expert and partner at the law firm Punter Southall Law, said: “Peter Flavel’s departure was inevitable for three reasons; failure to put a customer’s interests first; poor oversight within Coutts; and inaccurate communications with its parent.
“It shouldn’t have been down to the government to initiate Alison Rose’s departure, not least because they are conflicted as the largest shareholder. I’d expect the Financial Conduct Authority to be actively engaged with the boards of Coutts and NatWest to discuss how they can demonstrate adequate oversight, judgment and above all customer protection,” Hall added.
NatWest shares were down 1.3% on Thursday afternoon.
