Coutts CEO stands down in Farage bank account row, as Sunak fails to back NatWest chairman Davies – as it happened (2024)

Time for a recap of this afternoon’s events…

The head of NatWest’s private banking arm Coutts has resigned with immediate effect.

Peter Flavel became the second top executive to quit NatWest in a row over the closure of the account of former Ukip leader Nigel Farage.

Paul Thwaite, NatWest’s new interim CEO, said Flavel was leaving by mutual consent.

Thwaite said:

Whilst I will be personally sorry to lose Peter as a colleague, I believe this is the right decision for Coutts and the wider Group.

Flavel said he was taking “ultimate responsibility” for the bank’s treatment of Farage, after a report showed that “reputational risks” were a factor, along with commercial considerations, in the decision to closing his account.

Farage claimed that Flavel had been “asleep at the wheel” and had shown “an extraordinary kind of arrogance” by not getting in touch after receiving two emails about the situation.

Senior bosses at NatWest Group will face scrutiny from shareholders tomorrow when the bank releases its latest financial results.

The UK government is the largest investor, with a 39% stake. And earlier today, Rishi Sunak declined to say whether he had confidence in NatWest’s chairman, Sir Howard Davies.

Sunak said his Government was taking “tough action” to protect the free speech, amid concerns that banks are dropping customers over their political views.

Asked by broadcasters on Wednesday if he had confidence in Davies, Sunak said:

“What I said right at the start of this was that it wasn’t right for people to be deprived of basic services like banking because of their views.

“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?

“Do you believe in privacy, particularly on matters as sensitive as your financial information? Those are the values and questions at stake here and that’s why I said what I did.”

Shares in NatWest have dropped again today, and just closed down 0.8% at 239.9p.

That takes their total losses over the last two days, since Alison Rose’s departure early on Wednesday morning, to around 4.5%.

That has knocked around £1bn off the market capitalisation of the bank, in which taxpayers own a 39% stake.

NatWest won’t be able to escape the glare of the spotlight tomorrow, when it is due to release its financial results for the second quarter of the year, at 7am.

It can expect a flurry of question about the events of the last few days, and also on whether chairman Howard Davies will follow Dame Alison Rose and Peter Flavel out of the bank (Sir Howard is due to step down by next summer).

NatWest will also be quizzed about UK economic conditions, as mortgage-holders are hit by higher interest rates.

PA Media reports:

The bank, whose largest owner is the Treasury, is expected to reveal an operating pre-tax profit of £3.3 billion for the latest half year, up from £2.6 billion in the same period last year.

It could also see its provisions for loan losses surge to £264 million from £70 million in the previous quarter, as it braces for more borrowers struggling with debt repayments.

It follows rival lenders Lloyds Banking Group and Barclays reporting a jump in their half-year profits as they continue to benefit from interest rate rises.

Nigel Farage has now posted emails he sent to Coutts’s now-departing CEO, Peter Flavel.

In the first letter, sent on April 19, Farage says he has been told “out of the blue” that his account is to close, and suggests there may have been “some prejudice” in the decision.

Farage insists that he has no desire to go public with the issue (as he later did), but warns Flavel that “both of us would be in a very interesting public position” if he couldn’t find a new bank account.

In the second letter, sent on May Day, Farage says he has been rejected by several banks and “on current course” will be turning up at Coutts with a security van to collect the balance of his account.

Neville Hall, risk & compliance partner at Punter Southall Law, says Peter Flavel’s exit from Coutts was ‘inevitable’ for three reasons.

Hall told my colleague Anna Isaac:

“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 FCA 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.

Peter Flavel had joined Coutts as chief executive in March 2016 after leading JPMorgan’s private wealth business in the Asia-Pacific region.

Since taking over he had sought to modernise the image of the institution formerly known as the “Queen’s bank”, the FT points out.

One of NatWest’s 20 largest shareholders has told Reuters that chairman Howard Davies’ position is looking increasingly shaky.

Sir Howard’s head of one of the three which Nigel Farage demanded on Tuesday night, after Alison Rose confirmed she was the source of the BBC’s now-corrected story that the ex-Ukip leader lost his Coutts account for commercial, not political, reasons.

On Tuesday evening, Farage told viewers of his GB News TV show that:

Sir Howard Davies is responsible for overall governance. He has clearly failed in this task, least of all by endorsing their [Rose and Flavel’s] conduct. In my view they should all go.”

The head of the private bank Coutts has resigned, less than 48 hours after the departure of his boss, NatWest chief executive Alison Rose, amid over a growing row over former Ukip leader Nigel Farage’s bank accounts.

Peter Flavel stepped down “by mutual consent with immediate effect”, said NatWest Group’s acting chief executive, Paul Thwaite.

“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.

More here.

Here’s our timeline of how the crisis at NatWest, one of the UK’s largest banks, has unfolded in recent weeks: