My ongoing series on Nigel Farage’s Bank account debacle continues.

Congratulations to him, because not only did Dame Alison Rose resign as the head of NatWest, but the head of their subsidiary Coutts, Peter Flavel, resigned on Thursday, July 27, 2023.

I wrote about Dame Alison Rose’s resignation yesterday. Paul Thwaite has replaced her as interim NatWest CEO.

Little did I know that more news would follow that afternoon.

Peter Flavel resigns

Yesterday, I wrote:

The Times‘s view — the main editorial — also points the finger at Coutts’s chief Peter Flavel, who has managed to keep an exceedingly low profile throughout all of this …

As usual, Guido Fawkes beat many in the mainstream media in giving us breaking news.

At 14:11 on Thursday, he posted ‘Coutts CEO Peter Flavel Resigns’ (red emphases his):

Coutts chief executive Peter Flavel has resigned, less than 48 hours after his boss Alison Rose also quit for briefing false information – and breaching client confidentiality – to the BBC about Nigel Farage’s finances. He announced the inevitable this afternoon:

In the handling of Mr Farage’s case we have fallen below the bank’s high standards of personal service. As CEO of Coutts it is right that I bear ultimate responsibility for this, which is why I am stepping down.

Another scalp for Nigel…

Guido later posted Farage’s tweet at the news:

Guido ended his post with this:

NatWest Group chairman Howard Davies is still clinging to his job. For now…

More on Sir Howard Davies below.

At 2:15, The Telegraph published ‘Coutts chief steps down over Nigel Farage de-banking scandal’ (purple emphases mine):

Peter Flavel, who became boss of Coutts in 2016, said the treatment of Mr Farage had “fallen below the bank’s high standards of personal service.”

Paul Thwaite, the interim chief executive of NatWest, which owns Coutts, said: “I have agreed with Peter Flavel that he will step down as Coutts CEO and CEO of our Wealth Businesses by mutual consent with immediate effect.

“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” …

Mr Flavel said: “I am exceptionally proud of my seven years at Coutts and I want to thank the team that have built it into such a high performing business. In the handling of Mr Farage’s case we have fallen below the bank’s high standards of personal service. As CEO of Coutts it is right that I bear ultimate responsibility for this, which is why I am stepping down.”

His column inches are so short because he lay below the radar the whole time. Yes, he should have responded to Nigel Farage about his account closure. However cowardly his behaviour was though, he is the sort of man who believes that discretion is the better part of valour. No doubt he will get a nice payoff and be off to equally sunny climes in his career sooner rather than later. I’m not saying that in support of him, but discretion and integrity are important in life. It’s a pity he lacked integrity.

Note that NatWest’s first rule is to act with integrity. It’s a shame the person who posted this screenshot did not highlight the fourth point:

GB News reaction

On Thursday evening, GB News had several fascinating discussions on the Farage farrago.

On Dewbs & Co, Michelle Dewberry had as her panel Lord Moylan and historian David Starkey. Talk about a dream team. A woman even emailed Michelle to say how much she enjoyed listening to the two men:

They discussed Farage and NatWest in the opening segment, which begins at the 6:03 mark. Starkey criticised people like ex-BBC presenter Emily Maitlis for decrying Farage in this scandal.

Starkey is a Coutts customer. He said that the bank sent a letter to its customers saying that the bank ‘must not be brought into disrepute’ and said that the word ‘disrepute’ was used rather broadly there. He said he was surprised he hadn’t been cancelled. He is rather controversial on the conservative, traditional side of things.

He said that, when looking at the timeline of events, it was only when Farage threatened to go public that NatWest offered him an account with them to replace his Coutts accounts. Starkey then discussed Sir Howard Davies saying that he got the sack from the London School of Economics, which he headed, for giving Colonel Gaddafi’s son an unearned PhD in return for a sizeable donation from Gaddafi’s son’s foundation.

I mentioned this yesterday:

Alistair Osborne, one of The Times‘s business columnists, predicts ‘NatWest clearout looms after Farage fiasco’:

…

As for Davies, who’s on his way out anyway, his judgment has proved a throwback to the days when, as director of the London School of Economics, he accepted a £300,000 donation from a foundation run by Colonel Gaddafi’s son. The rest of the board — mainly a bunch of bankers, including Mark Seligman, ex of Credit Suisse, as the senior independent director — have also shown themselves incapable of governing a bank. Farage reckons they should all go. Again, he’s right. After this fiasco, a clearout looms.

Then Starkey told us that Davies was the first head of the Financial Conduct Authority (FCA)! Talk about failing upwards.

Both Starkey and Moylan emphasised how important client confidentiality was in banking. Moylan said that he worked for NatWest for a time 30 years ago. Staff received a regular employee bulletin. Under the social news of who got married was a list of people who were no longer employed by the bank. Moylan said that list of people either ‘had their hand in the till’ or broke confidentiality rules. Interesting.

Farage was up next. He was live in Bury that evening:

His editorial (5:43 mark) was about his lack of contact with Peter Flavel. At the 8:30 mark, he discussed Barclays’s call with shareholders that took place earlier that day and said that every question the shareholders asked was about de-banking.

Jacob Rees-Mogg’s State of the Nation followed:

I’ve posted the whole video because it’s excellent. In his editorial, he debunks the latest climate change report, then goes on to discuss climate change with his sister Annunziata and the founder of Labour’s radical wing, Momentum. Later on, he has a woman from PETA discussing Labour leader Sir Keir Starmer’s household rule that the Starmers’ children were not allowed fish or meat protein until they reached the age of 10. Rees-Mogg reminded his sister of how fond she was of processed ham as a youngster: ‘She could eat it by the hundredweight’.

The pertinent segment here is his discussion about ESG with businessman and ex-MEP Ben Habib:

Habib says that ESG runs everything and that the FCA have a prominent part to play in financial companies’ adherence because of reporting laws made in 2006 and 2008. That, incidentally, was when Tony Blair and Gordon Brown did their turns as Labour Prime Ministers. Habib says that financial corporation reports must include a section on how well the firms comply with ESG and how they will improve their adherence. He thinks the Government should change the law to relax the hold that ESG has on not only finance but other sectors of our society. He said that it should go by its other name, Diversity, Inclusion and Equity, because DIE is what is killing our social relationships. He said that he had been raised colour-blind — the way Martin Luther King advocated — but said that every aspect of DIE is advancing one group of people or policies over another.

On that note, NatWest is ‘purpose’-driven. Here is a screenshot I obtained which shows Dame Alison Rose championing ESG:

It is also a huge deal to qualify as a B Corp in the UK. They espouse ESG and DIE values and have given them the clever name of JEDI, the ‘J’ referring to ‘justice’, as in social justice.

Dan Wootton’s show came next. His editorial took issue with left-wing journalists and Labour politicians criticising Farage and saying that Dame Alison Rose’s dismissal was unfair, especially as she is a woman:

Unfortunately, GB News did not include the panel discussion afterwards. Conservative MP Dame Andrea Jenkyns said that she had had three bank accounts closed. She assumes this was because the bank deemed her to be a PEP, a politically exposed person. Someone else reminded her that she was a doughty supporter of Brexit, which might have been another factor.

Wootton interviewed Lord Frost:

The discussion about Farage only lasts the first couple of minutes. Frost is delighted that Farage and GB News are bringing this to light. The rest of the time is about how Frost has been labelled a climate change denier for saying that warmer temperatures would probably help Britain’s economy. They certainly would. Right now, it’s freezing. I’m sitting here in a long-sleeved shirt and a sweater.

Anyone wondering if Lord Frost will stand as an MP should know that he probably will. He tells Wootton that is where he can effect change. It’s a matter of not if but when. However, he quashes rumours that he wants to head the Conservative Party.

Headliners, which features comedians discussing the next day’s headlines, had a brief discussion on Emily Maitlis, who now has a podcast that airs on LBC. She said that Nigel Farage is trying to paint himself as the victim and is trying to ‘whip up a populist storm’. You can read more in a Telegraph article.

The Headliners headliners, even though they are left-leaning, took strong exception to Maitlis’s comments. Good for them:

On Friday morning, July 28, Breakfast discussed NatWest’s incredible profits over the past six months and Howard Davies’s questionable desire to remain as the banking group’s chair until his scheduled retirement in or around July 2024:

NatWest is 39% taxpayer-owned via the Government. We bailed it out after the 2008 banking crash.

Telegraph readers’ reactions

On Friday morning, The Telegraph published a selection of readers’ comments, ‘Nigel Farage de-bank, wildfires in Europe and “lazy girl” TikTok trends spark discussion’.

The first comment on Farage says:

Nigel Farage is right – the entire NatWest Board should go. They are responsible and accountable. That’s what being a senior director is. And now we need an investigation into all the banks, big and small, as this type of discrimination could well be embedded in the sector.

The second reads:

These top executives really don’t get it. Dame Alison Rose may well have achieved great things at the bank but her behaviour and that of the board reveals that such people are removed from the fundamental concerns of ordinary people – people who work just as hard, people who are just as capable, as Dame Alison but who are not remunerated with absurd salaries of £5.2 million.

Why they did not immediately understand that you cannot breach client confidentiality in the way she did as CEO and stay in post is an appalling indictment of their professional judgement. They are out of touch with the concerns and values of their customers; instead of listening to their marketing departments and pandering to the likes of Stonewall, they should get their hands dirty and go and work in a branch every once in a while.

The third says:

The so called highly ethical culture of banking which punishes the average man by closing accounts with no explanation or assistance is now truly exposed because NatWest took on a client too big to get away with their behaviour.

I am hoping this harsh treatment of Rose will give the banking sector the much needed shake up it needs for punishing the little man and forcing them out of the system effectively for minor mistakes made in everyday life.

This is a classic case of my enemies’ enemy is my friend, so Mr Farage hence has my full support and I am delighted to see a few senior banking heads roll.

Sir Howard Davies: sad but not sorry

On Friday morning dawned, The Telegraph reported on what NatWest’s chair had said to the media in a conference call. He spoke to shareholders afterwards:

Sir Howard Davies said he serves “at behest of shareholders” but intends to stay on despite the botched handling of the departure of chief executive Dame Alison Rose …

Asked if he has reflected on his position this week, Sir Howard said: “It would be surprising if I hadn’t reflected on my position. So the answer is yes.”

Sir Howard, a former deputy governor of the Bank of England is already preparing to step down by mid-2024 when he will have reached the maximum permitted length of his tenure as chairman – a role he assumed in 2015.

He was speaking as the bank revealed it increased pre-tax operating profit by nearly £1bn year-on-year to £3.6bn in the first six months of 2023.

The results were higher than forecast.

The Guardian‘s live coverage began earlier. Highlights follow, green bolds in the original:

At 6:49:

… NatWest is due to release its financial results at 7am. City analysts predict it will post an operating pretax profit of £1.49bn for the second quarter of 2023.

That would take earnings so far this year up to £3.3bn, up from £2.6bn in the same period last year.

NatWest, which has lost its CEO Alison Rose and the head of Coutts, Peter Flavel, in the last two days, may try to restore a sense of order as it updates investors about its performance …

At 7:20:

… NatWest has announced an interim dividend of 5.5p per share this morning, which will return around £492m to shareholders.

As the UK government owns 38.53% of NatWest, this means £190m will go to the government on 15th September.

Good.

At 8:18:

Speaking to reporters this morning, Davies says NatWest’s board met yesterday and agreed to the terms of reference for an independent review into the handling of Nigel Farage’s accounts at Coutts.

This review will examine the way in which information about that issue has been handled within the bank. The terms of reference of that review will be released today and the finding will be released “in due course”, says Davies.

He adds:

My intention is to continue to lead the board and ensure that the bank remains sound and stable and able to support our 19 million customers.

At 8:26:

Davies: political reaction forced “great leader” Alison Rose out

… He told reporters:

We took the view on Tuesday that even though mistakes had been made, it was on balance right to retain Alison Rose as our CEO.

But the reaction was such as to convince her and the board that her position was untenable.

Davies added that:

I clearly regret the way things have turned out. We’ve lost a great leader as a result, but I now have to look forward.

He was only sorry they got caught!

Also at 8:26:

When asked whether Farage’s accounts at Coutts had been reinstated, Howard Davies says it is “not appropriate for me to speak about the state of his accounts”.

At 8:39:

… Howard Davies says the bank always has an emergency plan ready for unexpected departure.

This plan was considered a few months ago, and NatWest decided Thwaite was the right person to be emergency successor.

This was discussed with Paul himself, Howard Davies says; Thwaite obviously wasn’t expecting this to happen, but was prepared to take the role on.

This position was also discussed with regulators, Davies adds, as they would expect a bank to have a succession plan in place.

At 8:43:

Davies says NatWest’s independent review into the closure of Nigel Farage’s Coutts account will have three dimensions.

It will cover: the decision to close the accounts of Mr Farage; the circumstances around the BBC article (which initially said it was a commercial decision); and to review other Coutts account closures.

At 8:45:

And with regards to the Financial Conduct Authority’s involvement on the Farage bank account debacle, Howard Davies confirms the regulator have raised concerns with the bank.

With regard to account closures, these issues should be independently reviewed; we can certainly assure that will happen, Davies adds.

At 9:02:

NatWest is also asked about Alison Rose’s exit pay, following reports that she could receive a ‘multi-million-pound pay-off’.

Howard Davies says he can’t say precisely when details of the package will be published, explaining:

The independent review will take place and then we’ll have to consider it.

Davies adds that he doesn’t see a reason to depart from the normal practice of reporting executive pay.

He also explained, earlier in the call, that decisions on Rose’s pay can’t be made until the independent review has been completed.

At 9:19:

NatWest has appointed law firm Travers Smith to independently probe its handling of the Farage affair, our City editor Anna Isaac explains.

… One of its more sensitive tasks will be to put a spotlight on the circumstances and nature of any leaks to the press, and what confidential information may have been passed from the banking group to the media, including the BBC.

Beyond the handling of Farage’s accounts, the probe will also look at all accounts closed at Coutts over the past 24 months. It will follow a similar approach as with the Farage-specific investigation: looking at questions of how and why accounts were shut, and what was said to all other customers whose accounts were shut down.

And on a related topic, albeit with a different bank, this news emerged at 10:41:

Politicians on the right of the political spectrum aren’t the only ones to fall victim to ‘debanking’, it seems.

According to the BBC, anti-Brexit campaigner Gina Miller was told a bank account for her political party would close without explanation.

The BBC reports:

Monzo initially refused to tell Ms Miller why her “True and Fair” party account would be closed in September.

After the BBC contacted the bank about the case, it said it did not allow political party accounts and had made a mistake in allowing it to be opened.

Monzo said it recognised the experience would have been “frustrating for the customer and we’re sorry for that”.

More here.

At 13:12, we learned that the Bank of England is bringing in Ben Bernanke to review its dismal forecasting:

Newsflash: Dr Ben Bernanke, the former head of America’s central bank, the Federal Reserve, is to lead a review into the Bank of England’s forecasting.

The BoE says the review will aim to “develop and strengthen” the Bank’s support for the Monetary Policy Committee’s approach to forecasting and monetary policy making in times of uncertainty.

This follows criticism that the Bank failed to predict the surge in inflation over the last year or two, meaning it was too slow to tighten monetary policy by raising interest rates …

A month ago, the Bank’s chief economist, Huw Pill, said the Bank’s forecasting models became become “unworkable” in the current crisis, as they failed to fully appreciate the the interaction of high energy prices and a tight jobs market.

At 14:29:

Farage supports Gina Miller over bank account access

The row over access to UK bank accounts is creating some unlikely alliances.

Nigel Farage has thrown his backing behind anti-Brexit campaigner Gina Miller, after it emerged this morning that Monzo bank is to close the bank account of Miller’s True and Fair party.

Farage says he stands with Miller, who famously challenged the UK government in 2016 over its authority to trigger the process of leaving the European Union without parliamentary approval.

Miller warned this morning that “we don’t have a functioning democracy” if new political parties cannot access banking services.

At 14:53:

Nils Pratley: It will be surprising if NatWest’s Howard Davies hasn’t gone by Christmas

Can Howard Davies cling onto the top job on the NatWest board until 2024?

Our financial editor, Nils Pratley, thinks not – even though Davies himself hoped to hang on until July 2024, before the Farage bank row blew up.

Nils writes:

Davies has probably escaped the need for an instant resignation only by virtue of the fact that he was going anyway. Plan A, which pre-dates the Coutts fiasco, was for him to leave by July next year for the conventional reason that his nine-year term will be up at that point. An obvious strategy now would be to accelerate the timetable and get out as soon as is practical.

Since the search for a new chair has already been running for a few weeks, it should not take ages to find a new face, even if the pool of likely volunteers may have shrunk over the past week. One suspects Davies will want to be out in the autumn, or at least to have named his successor by then. And it will be amazing if he’s still there by Christmas. Under a new chair the necessary broader overhaul of the boardroom after the incompetence of the past month can begin.

I hope Nils Pratley is right. GB News has reported that Davies does not have the Prime Minister’s support.

At 15:09:

… NatWest cut its forecast for its net interest margin (the gap between what it charges borrowers and pays savers); a sign that some people have been running down their savings or moving them to more lucrative accounts …

Hmm.

Is this yet another case of ‘go woke, go broke’?

We shall see.

For now, I have one more banking post to come next week.