FCA to review NatWest over "potential regulatory breaches"

The Bank's own independent review found that the closure of Nigel Farages's account was lawful but found “serious failings”.

Related topics:  Finance News,  Regulation
Rozi Jones | Editor, Barcadia Media Limited
27th October 2023

The FCA has launched a review into NatWest over its treatment of Nigel Farage's Coutts bank account.

NatWest's own independent review found that the closure of Farage's was lawful but there were “serious failings” in how it treated him.

Corporate law firm, Travers Smith, said NatWest had acted “in accordance with the relevant bank policies and processes”, concluding that the bank "considered its relationship with Mr Farage to be commercially unviable because it was significantly loss-making".

However, the report also identified “a number of shortcomings” at NatWest, relating to how it communicated with Farage and how it treated his confidential information.

NatWest's CEO, Alison Rose, later resigned from her role after discussing Farage's relationship with the bank.

The Information Commissioner's Office (ICO) investigation found that Rose breached two data rules when sharing details about Farage's account to the BBC.

Today, the FCA announced that is has been "intensifying supervisory work in relation to NatWest Group and Coutts since the widely reported events earlier this year".

The regulator has reviewed the findings of the independent report, commissioned by NatWest. The FCA said the report, along with additional information, has "highlighted potential regulatory breaches and a number of areas for improvement".

These include the bank's processes, systems and controls around how it considers the potential closure of accounts and handles complaints from customers, as well as the allocation of responsibilities and effectiveness of the firms' governance mechanisms.

The FCA is now reviewing how NatWest's governance, systems and controls are working to identify and address any significant shortcomings.

NatWest chair, Howard Davies, commented: “This report sets out a number of serious failings in the treatment of Mr Farage. Although Travers Smith confirm the lawful basis for the exit decision, the findings set out clear shortcomings in how it was reached as well as failures in how we communicated with him and in relation to client confidentiality.

“We apologise once again to Mr Farage for how he has been treated. His experience fell short of the standards that any customer should expect. Our job now is to make sure that does not happen again.

“The bank is committed to implementing all the recommendations made by Travers Smith and we are making substantive changes to our policies and procedures, in particular to ensure that the lawfully protected beliefs or opinions of customers do not play any role in our decision-making.”

Alison Rose said: “I note the Travers Smith report this morning. This confirms everything I told the Board in July was correct. Both Travers Smith and the Information Commissioner's Office have concluded that I inadvertently confirmed what had already been widely reported, that Mr Farage held an account at Coutts. The ICO also concluded the ‘impact around this specific disclosure was minimal’.

“Travers Smith is clear that ‘there was no leak of specific detailed financial information’. Travers Smith also confirmed I knew nothing about the comments made by Coutts staff about Mr Farage, which were deeply unpleasant and unfair.”

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