LONDON, Dec 15 (Reuters) – The second phase of a review by NatWest (NWG.L), opens new tab into account closures by its private bank Coutts found potential regulatory rule breaches but no evidence of discrimination over people’s politics, the British bank said on Friday.
NatWest was plunged into crisis this year after a damaging row with former Brexit party leader Nigel Farage over a decision to close his bank accounts with Coutts.
The episode sparked a political backlash and ultimately led to the departure of the bank’s CEO Alison Rose, as well as of Coutts’ former boss Peter Flavel.
NatWest said on Friday that the review identified several areas where Coutts’ “exit decisions” could be improved, including how the bank communicates with customers.
In also identified some potential breaches of Financial Conduct Authority (FCA) rules to treat customers fairly, and potential breaches of contract for failing to explain exits.
The FCA said it would consider the report as part of a previously announced review of how the bank’s governance, systems and controls are working.
NatWest said its review – carried out by law firm Travers Smith – analysed 84 Coutts customer account closures, representing a 10% sample over a two-year period to July 2023.
The first part outlined “serious failings” in the bank’s treatment of Farage. NatWest cancelled about 7.6 million pounds ($9.70 million) in potential bonuses for Rose over the fiasco.
‘INCONSISTENT WITH PURPOSE’
Farage’s treatment by Coutts came into focus in July after he obtained an internal document outlining he was being cut partly because an internal committee had decided his views did not align with the lender’s own.
The first phase of Travers Smith’s review found that the bank had nonetheless acted lawfully and mainly on commercial grounds.
While the second part of the review found no evidence of discrimination due to political views, it found a case where “the predominant reason” for shutting the account was because the customer was deemed “inconsistent” with the bank’s corporate “purpose”, and another where this was also a factor.
However, the review said neither involved political views and were not judged to breach standards.
“The experience of some of our customers fell short of what they should expect, and we apologise to them,” said Mohammad Syed, Chief Executive of Coutts, who added that the bank was committed to implementing all the report’s recommendations.
Farage said in a statement on Friday that the report revealed serious deficiencies in the way NatWest close bank accounts. “The NatWest group now need to take a cold, hard look at their own procedures,” he said.