NatWest chair Howard Davies said he plans to continue leading the bank and has appointed law firm Travers Smith to investigate the closure of Nigel Farage’s Coutts account.
“At yesterday’s board meeting, we agreed the terms of reference of an independent review led by Travers Smith into the handling of Mr Farage as a customer of Coutts and the way in which information about that issue has been handled within the bank,” Davies said on Friday morning.
“The terms of reference will be available today and the findings of those linked reviews will be released in due course,” he added.
NatWest has attempted to draw a line under a tumultuous week that saw the departure of its chief executive with a set of strong second-quarter results that beat analysts’ expectations.
Revenues in the quarter rose 20 per cent to £3.9bn, beating analysts’ expectations of £3.7bn. Pre-tax operating profits of £1.8bn were 26 per cent higher year on year, and ahead of estimates of £1.5bn.
Despite macroeconomic uncertainty, impairments for the quarter of £153mn were significantly below the £264mn predicted by analysts, although above the £18mn release in the same period last year.
The lender has been embroiled in a clash over the past month with former Ukip leader Farage after private bank Coutts, which it owns, closed his account.
The pressure intensified after Farage obtained a 40-page dossier produced by the bank’s reputational risk committee, which revealed that his account had been closed in part because of his political views.
Chief executive Alison Rose resigned on Wednesday after admitting to inaccurately briefing a BBC journalist over the reason that Farage’s account was closed. Coutts chief executive Peter Flavel stepped down on Thursday, taking “ultimate” responsibility for the bank treatment of the former politician.
The departure of Rose, who won government plaudits, honours and a damehood after becoming chief executive in 2019, is a blow to the bank, which focused on bolstering its environmentalism under her tenure as well as exiting its business in the Republic of Ireland.
The scandal has heaped pressure on the bank’s board, with chair Howard Davies the target of investor frustration over a failed initial attempt to keep Rose in place despite her admission. Regulators are looking into whether any rules or laws were broken.
On Wednesday, executives from major UK banks, including NatWest, committed to upholding clients’ “freedom of expression” in a meeting with City minister Andrew Griffith. The government also wants to increase the amount of notice banks must give to customers if they intend to close their accounts.
NatWest shares were flat in early trading in London on Friday. Its shares are down more than 11 per cent in the year to date, following the political scandal and wider industry pressures following the collapse of Silicon Valley Bank in March.