Stay updated with the latest Banks news by subscribing to our free myFT Daily Digest email. We’ll deliver a roundup every morning.
The decision of Coutts, famously associated with banking for the upper class, to distance themselves from Nigel Farage due to reputational risks has ironically backfired, causing significant damage to the bank and NatWest, its parent company. This serves as a lesson for businesses dealing with ongoing “culture wars”. However, NatWest and Coutts have not adequately handled this situation, falling short of expectations for such renowned British businesses. Consequently, the resignation of Dame Alison Rose, the group chief executive, became inevitable.
The original decision made by Coutts to “debank” Farage was misguided, as evidenced by the 40-page dossier that resembled a poorly executed copy-and-paste job from a Google search. Although the dossier mentioned valid commercial grounds for cutting ties with Farage after he paid off his mortgage, it concluded that offering banking services to him was incompatible with Coutts due to his expressed views conflicting with their stance as an inclusive organization.
NatWest’s Rose faced accusations of breaching client confidentiality when anonymously suggesting to some journalists that Coutts’ decision was solely driven by commercial motives. On Tuesday, she admitted to a “serious error of judgment” but denied disclosing any personal financial information. Farage himself made the issue public through a video where he complained about the loss of his account, without initially mentioning Coutts. Nevertheless, Rose claimed she didn’t possess all the facts, indicating an unintentional mistake rather than a deliberate cover-up.
Initially, the NatWest board deemed this misjudgment insufficient for Rose, who had an otherwise solid record, to lose her position, although her compensation might be affected. Embarrassingly, government intervention was necessary to force their hand, considering that the taxpayer holds a 39% stake in NatWest due to the 2008 financial crisis bailout of what was then RBS. Consequently, the government naturally wields more influence than other shareholders.
A crucial lesson emerges from this situation: a person’s legal political opinions should not hinder their access to banking services. This applies to any individual, and other troubling cases have come to light since the Farage incident. Rose faced backlash from “anti-woke” campaigners due to her commendable support for purpose-led banking, but NatWest and Coutts’ proclaimed inclusivity must encompass tolerance for diverse views unless they cross legal boundaries.
Additionally, the challenges faced by politically exposed persons (PEPs) in obtaining banking services have been brought to the forefront. Clearer regulations are necessary, with banks focusing their assessment of PEPs on potential corruption or money laundering, rather than scrutinizing political views unless exceptional circumstances arise. Individuals who choose a career in politics or public service should not face difficulties in accessing what is considered a fundamental right.
Farage, aiming to be a voice for the “many thousands of innocent people” unfairly excluded from banking, has expressed his dedication to this cause. As long as his efforts remain focused and avoid becoming a divisive crusade in the ongoing culture wars, this could be a meaningful avenue for his activism. While today’s debacle has created a leadership void in one of the UK’s top banks, it may ultimately have positive effects if it prevents similar incidents in the future and contributes to broader access for the unbanked.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
