The chief executive officer of NatWest Group Plc, Alison Rose, is resigning amid a scandal related to the fact that this financial institution closed the account of Nigel Farage, a politician-turned-pundit.
Alison Rose has been working as the head of one of the largest British banks since November 2019. The announcement of her resignation came just a few hours after the statement of the bank’s board of full confidence in Mrs. Rose.
The lender, commenting on the step down of the CEO, noted that this process takes place by mutual consent. The interim management of the financial institution will be taken over by Paul Thwaite, who is the head of the bank’s commercial and institutional business. He will work as CEO for no more than 12 months. Also, in a special statement of the financial institution on the occasion of the resignation of Alison Rose, it is indicated that the process of appointing a permanent successor will be carried out in due course.
The media draw attention to the fact that the bank announced the resignation of the current head of NatWest after an emergency meeting of the board of directors late on Tuesday evening, July 25. The meeting was also attended by British Prime Minister Rishi Sunak and Chancellor of the Exchequer Jeremy Hunt, who stated that Elise Rose’s position in the context of the situation with the closure of Nigel Farage’s account is untenable.
The Board of the financial institution initially interpreted the situation in other exegesis. The scandal, which has a certain degree of public resonance, broke out after Alison Rose, during a conversation with journalists, confessed to the decision to close Nigel Farage’s account. The Management of the bank initially maintained a very restrained position on this issue, saying that as part of the implementation of the measure of responsibility for the incident, the salary of the head of the financial institution may be reduced and at the same time noted that her resignation does not meet the interests of all shareholders and clients of the lender.
It was only a few hours after the first public announcement of the opinion of the NatWest board of directors on the scandal, and the departure of Alison Rose was supported as the only right decision. This did not happen without the influence of such a factor as political pressure. Against the background of what is happening, the share price of the financial institution decreased by 3.3%.
Nigel Farage, during a conversation with media representatives, said that the lender should take another measure as part of the settlement of the current situation. This measure, in his opinion, should be the resignation of Peter Flavell, who heads NatWest Coutts.
City Minister Andrew Griffith welcomed the progress of the settlement of the situation. He stated that there would be no problems if the financial institution had not decided to withdraw money from the account due to the legitimate political views of the owner of the funds. According to him, this practice of banks’ actions is unacceptable. He also expressed the hope that this case will be instructive for the entire financial sector.
The UK as a state is the largest shareholder of NatWest. About 15 years ago, the government of the country saved this bank, at that time called Royal Bank of Scotland, and suffered huge losses, providing financial assistance in the amount of 58.6 billion dollars.
A few weeks ago, Nigel Farage launched a wave of criticism of NatWest Coutts after this unit of the lender, serving the richest residents of the UK, including members of the royal family, refused to work with him. He said that he had received documents from the financial institution indicating that the employees discussed the inconsistency of his views in the area of migration policy, containing a low level of tolerance for measures that support conditions for a large flow of visitors to the country, with the goals of the bank.
Alison Rose, even before the decision to resign, sent a letter of apology to Nigel Farage, in which she stated that the documents prepared for the NatWest Coutts welfare committee about the former leader of the UK Independence Party were not a reflection of the lender’s position. She also noted the illegality of the client’s dismissal because of his views on political issues and other aspects of life.
Tomasz Noetzel, an analyst at Bloomberg Intelligence, says that the new interim CEO Paul Thwaite is facing a lot of problems, including the issue of managing the net interest margin amid public pressure to increase the cost of deposits. Also, according to him, the need for a decision on increasing the reserves of IFRS9-driven is being updated, due to the likelihood of a recession in the UK.
As we have reported earlier, NatWest Launches Incentives for New and Expanded Business Accounts.