Taxpayer-backed NatWest was forced into parting ways with chief executive Dame Alison Rose this week because of the political storm over its closure of Nigel Farage’s account, its embattled chairman said on Friday.
The remarks by Sir Howard Davies came as the bank capped a turbulent week with a £1 billion surge in profits, which fuelled criticism that NatWest and its High Street competitors are failing to pass on higher Bank of England interest rates to millions of savers.
He insisted it was a “rational decision” for the NatWest board initially to back Dame Alison after it emerged that the group’s private banking arm Coutts was shutting down Mr Farage’s account.
“We made that decision based on careful assessment of the upsides and the downsides of doing so,” he said. “However... the political reaction to that was such that Alison and I then concluded, and the board supported the view, that her position was then untenable. She would be running the bank in the face of very difficult headwinds.”
The chairman confirmed an independent review into the handling of Mr Farage’s account. NatWest at first said the Brexit figurehead had failed to meet its net worth requirements, before it emerged that his politics were a factor.
But Sir Howard’s own position remains precarious following this week’s exits of Dame Alison and Peter Flavel as boss of Coutts, with Rishi Sunak pointedly refusing yesterday to express confidence in the group chairman. The PM said: “This isn’t about any one individual, it’s about values — do you believe in free speech and not to be discriminated against because of your legally held views?”
Sir Howard this morning insisted he would continue at the bank to ensure “stability” after the resignations.
Responding to Sir Howard, a Treasury spokesman said: “Freedom of speech is a cornerstone of our democracy and we have always been clear that anyone — regardless of who they bank with — should be free to lawfully exercise this fundamental right without the fear of having their bank accounts closed.”
Shadow chancellor Rachel Reeves has accused No10 and the Treasury of “bullying” Dame Alison into resigning, but shadow home secretary Yvette Cooper declined to repeat the charge today.
“I think it’s emerged that obviously there was a breach of privacy. There’s a real responsibility on all banks to make sure that they protect client confidentiality,” Ms Cooper told LBC.
NatWest’s political troubles broadened after the bank posted a 38 per cent rise in operating pre-tax profit to £3.6 billion for the year’s first half, up from £2.6 billion a year earlier. Treasury committee chairwoman Harriett Baldwin highlighted the mounting pain felt by millions of mortgage holders as NatWest and other banks hit them with higher lending rates — while holding back on awarding higher rates to savers.
She told the Standard: “They don’t seem to have any trouble passing on higher rates to their existing borrowers... the time for foot-dragging and weak excuses is over.”
