NatWest Group has reported a rise in half-year profits amid turmoil at the top involving the resignations of two chief executives over the leaking of details of Nigel Farage’s bank account.
The bank was dragged into an embarrassing row when Mr Farage revealed that his account with private bank Coutts, owned by the NatWest Group, was closed partly because of his political views.
The taxpayer-backed lender revealed an operating pre-tax profit of £3.6 billion for the latest half-year, up from £2.6 billion in the same period last year.
But senior bosses are set to face scrutiny from shareholders after the shock departure of NatWest chief executive Dame Alison Rose wiped 3.6 per cent from the bank’s share price on Wednesday. It knocked £850m from NatWest’s value and hit taxpayer shares by more than £320m.
And on Thursday, the furore claimed a second bank boss’s scalp, when Peter Flavel, chief executive of upmarket bank Coutts resigned over his role in the closure of the accounts of the former Ukip leader.
Mr Farage said the banking sector was “making massive profits whilst treating the public badly”.
“The NatWest profits are no great surprise,” he said. “Interest payments have risen sharply yet deposits have lagged.”
Dame Alison apologised and admitted making a “serious error of judgment” when she discussed his bank account with a BBC journalist.
The BBC News story had wrongly said the closure had been motivated by commercial reasons only, citing a “failure” by Mr Farage to meet a £1m borrowing requirement.
But Brexiteer Mr Farage presented a dossier showing his Coutts account had been closed partly due to his political views. Internal documents labelled him as “xenophobic and racist”.
Dame Alison later admitted she was the source of the BBC story.
Earlier this year, she received a substantial payout of more than £5m following robust profits – the first time NatWest had granted a bonus to a chief executive since the government’s rescue of the company during the 2008 financial crisis.
The departures of Dame Alison and Mr Flavel have piled pressure on Sir Howard Davies the chairman of NatWest, who initially expressed “full confidence” in Dame Alison.
Sir Howard, who has faced calls to quit, told reporters on Friday morning he has “reflected” on his position but decided to stay on as chairman of the bank.
“I serve at the behest of shareholders but will continue to do so because I think it is important there is some stability here,” he said.
Peter Flavel has also stepped down as CEO of Coutts
He sought to clarify the reversal of the board’s stance on Dame Alison, having expressed “full confidence” in her as chief executive just hours before she was forced to quit.
The “political reaction” to the decision to keep Alison Rose in post meant her position was “untenable,” Sir Howard said. He added that in his eight years running the bank, the government has not interfered in commercial decisions, but said “these were very exceptional circumstances”.
“The government took a view which was not the view that the board had taken… we’ve lost a great leader as a result,” Sir Howard said.
He also confirmed NatWest has launched an independent review into the handling of Mr Farage’s Coutts account.
Dame Alison Rose resigned as NatWest chief executive earlier this week
