NatWest shareholders have ramped up pressure on chair Sir Howard Davies to step down for mishandling the fallout from the closure of Nigel Farage’s bank account. “He’s clearly not in charge,” said a top-20 investor on Wednesday. “Banking is about trust and confidence. That’s sacrosanct and starts with the tone from the top.”
NatWest chief executive Dame Alison Rose stepped down from the Ulster Bank parent in the early hours of Wednesday morning after admitting to misleading a BBC journalist about the closure of the former UK Independence party leader’s account at its private bank, Coutts.
The announcement came only seven hours after Sir Howard, who has been chair of NatWest since 2015 and is nearing the end of his tenure, said Ms Rose retained the “full confidence” of the board despite her confession. He praised her as an “outstanding leader of the institution” and said that it was “clearly in the interest of all the bank’s shareholders and customers that she continues in post”.
“My suspicion is that he will end up going, but probably shouldn’t have to,” said a second top-20 investor, questioning whether he had cleared the statement of support with the government before its release.
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According to a person briefed on the process, Sir Howard consulted the government and regulators on the bank’s stance before releasing the statement on Tuesday. NatWest shares were down more than 3 per cent in early afternoon trading, making them the biggest faller on the FTSE 100 and extending their decline to almost 11 per cent this year. The drop comes despite the boost in earnings the bank has received from rising interest rates. NatWest reports its second-quarter earnings on Friday.
The UK government owns 38.69 per cent of the lender, down from a peak of 71 per cent in 2016.
On Wednesday, Mr Farage said the bank should “put in place very quickly a new interim board”. He has also called for Coutts chief executive Peter Flavel to go.
Craig Mackinlay, a Conservative MP, called for the resignation of Sir Howard as well as Mr Flavel. “Both need to bear due responsibility for this unsavoury mess,” he told the Financial Times. “The Farage saga with the NatWest group is both shameful and sinister,” he said. “Perhaps it is time for a more substantial clean-up of the board.”
David Davis, a former UK cabinet minister, said Mr Flavel’s future should be in doubt in the wake of Rose’s resignation. “I don’t like aiming for the juniors, the person who should pay is the person with the biggest pay packet,” he said.
Despite the pressure from shareholders and some MPs, senior government figures suggested that Sir Howard’s position was more secure than Ms Rose’s had been, given that she quit after admitting she personally leaked customer information in potential breach of data confidentiality laws. “The issue was Alison – she briefed a journalist incorrect information,” said one UK Treasury figure. “He always wants a revolution,” said one UK minister of Mr Farage’s demands, noting that Sir Howard is already approaching the end of his tenure.
NatWest declined to comment. Sir Howard did not respond to a request for comment.
Ms Rose has been under mounting pressure since Mr Farage, a divisive figure who presents a show on the GB News channel, produced evidence that NatWest’s private banking business Coutts had decided to close his account partly because his political views went against its values.
She admitted this week that she had given a BBC reporter the impression that Coutts took the decision for solely commercial reasons, and said the conversation was a “serious error of judgment”. The broadcaster apologised to Mr Farage on Tuesday for an inaccurate report about why his account was closed.
Ms Rose will leave the bank, whose biggest shareholder has been the UK government since a taxpayer bailout in the 2008 financial crisis, with immediate effect, NatWest said. She has worked there for more than 30 years and became chief executive in 2019.
Paul Thwaite, chief executive of NatWest’s commercial and institutional business, will take over for 12 months while it searches for a permanent replacement. Mr Thwaite is seen as the leading internal successor to Ms Rose, with the bank’s chief financial officer Katie Murray also likely to be in the running. External candidates could include Joe Garner, who until last year ran Nationwide Building Society, the UK’s largest member-owned lender.
Among the ranks of current banking bosses, Irishman David Duffy, chief executive of Virgin Money UK and former AIB chief executive, could feature in candidate lists, as could former Bank of Ireland chief executive and current Credit Suisse chief operating officer Francesca McDonagh.
Ms Rose said she was “immensely proud of the progress the bank has made in supporting people, families and business across the UK, and building the foundations for sustainable growth”. – Copyright The Financial Times Limited 2023 (Additional reporting: Bloomberg)
