When you have someone like Nigel Farage on your case, that might not be what they get. And certainly he's now talking about this as a crusade against the bank and against the wider banking industry. If history tells us anything is once Nigel Farash gets his teeth into something, he doesn't tend to let go quickly.
I'm David Merritt and this is in the City Bloomberg's podcast, connecting you to the conversations at the heart of the City of London. And this week there is only one story in town, and that is the resignation of Alison Rose, the chief executive of nat West.
It's the chief executive nat West Bank.
That's Dame Alison Rose has resigned after admitting that she was the source for a.
BBC story about Nigel Farage's bank details.
He's already made it clear actually on Twitter k that he wants to see Sir Howard Davis, the chairman of nat West, step down as well.
Dame Alison Rose been thirty one years climbing through the NatWest ranks from graduate trainee to first female boss of a major UK bank. It took just weeks for her career to crumble she.
Has been brought down by Nigel Farage, the great disruptor of the British establishment, who has struck again. He's brought down the boss of one of the UK's largest retail and commercial banking groups. So joining me today to pack that story. I'm delighted to have Harry Wilson, Bloomberg's banking reporter, Paul Davies, Bloomberg opinion columnist covering banking and financing, Joe Mays, who is a reporter on our UK Thank Government team.
Welcome to in the city everyone, Thank you. This story has been rumbling for a couple of weeks now, Harry, can you explain how this all kicked off and how we got to the point where the chief executive of NatWest has had to resign overnight.
It's a pretty extraordinary story, and it started innocuously enough with Nigel Farage announcing on its Twitter that he'd been debanked and was perhaps going to be forced out of the country. Now, at that point we didn't know what the bank was, but it quickly became apparent that the institution in question was Coots, which is the private banking
arm of nat West. Things escalated very quickly from there, apologies were issued and dossier was produced which showed that Forage, as he had insinuated, had indeed been dropped in part because of his political beliefs. But then things took a pretty crazy turn, which was that there was a BBC's story which came out and appeared to be immaculately sourced, which said that Forage had been dropped in fact because of him falling below a wealth criteria. Now that was
disproved to a large extent by this dossier. Then came
obviously the apologies I mentioned, but that wasn't enough. And following a sort of heady twenty four hours now in which NatWest apologized twice, Alison Rose, the bank's CEO, issued her own statement in the early hours of this morning, wrote herself stepped down after having previously admitted to a serious error of judgment, and now we are we have one a love largest banks in the UK with an interim CEO Andarage still on the warpath trying to call for the chairman to go now.
So as we're taping this on Wednesday morning, Farage is calling for more people in the board of that West to step down. Earlier this week he called for a full parliamentary inquiry in this.
I mean anybody, even down to a junior clark in a bank who've reached the confidence of a customer would have to go. This is a non part of his ansty. This is not left or right wing politics. This is about the British banking industry. It's about our financial services industry. It's about the biggest employer in this country at masses.
He's kind of got his scalp now, hasn't he. Do you think this draws a line under the scandal for that West Or is Nigel Farage going to succeed in in persuading more of them at the bank to have to step down.
If you said a week or so ago that Rose would go over this, I think a lot of people would have looked at you slightly as sconce And now it's happened and definitely has the wind in his sales now and also crucially he has an awful lot of political support. It it's not just that he is doing these things.
You know.
There was a very much a briefing campaign overnight from Number ten, from the Prime Minister's office and from the UK Finance Ministry, both basically saying that Rose had lost their confidence and it's really that which seems to have
kicked things over the line. And so with that in mind, you look at what the board did and I guess the question then is, well, they seem to think that they had this thing sussed yesterday afternoon with Rose agreeing to potentially cut her pay, but actually obviously that wasn't enough, and then that starts raise questions about their own judgment. It would be too early to say that this is a done deal. In for instance, the chairman Howard Davies can quietly get over this because he is due to
be going anyway next year. But this obviously could hasten that.
I mean, Allison Rose spent thirty years at that bank. There's rosen to become one of the most high profile female chief executives in Britain. But you mentioned the politics on this, and yes, on Tuesday, when it became clear that the Prime Minister that other members of the cabinet were losing confidence in Rome, then I guess her position became more untenable.
The fact that Alison Rose was such a darling of the UK business community and indeed the UK government. Richie su nak Jeremy Hunt would constantly talk so highly of her. Now, she was brought in to run the government's entrepreneurship Review, she was on various business advisory councils. She was with Richie Stunac only last week in Number ten smiling at the Cabinet table, laughing together. And then for Number ten and Number eleven to really come up last night and
brief so hard against her. It shows me the real political edge of this story and how the government has seized on this issue and is trying to use it as a wedge against labor, who's saying, you know, they're not standing up free speech amongst people who bank and so on. I think that that's just a re striking to note.
To remember here, of course, that the UK government still is the biggest shareholder in that west. Nigel Farage has disrupted British politics now for decades. He of course led the exit of Britain from the European Union, arguably bringing down various Conservative prime ministers in his way. How is he still able to disrupt the British establishment so effectively In.
Terms of Nigel Farage, I think that part of what's going on here is that Richie Sunak knows that he has a slight vulnerability on his rights on the right flank of the Conservative Party, and there are still influential figures within his party. You have David Davis, Prime Minister.
Back to the question raised quite rightly by biragical Friend, the Member for Northeast Somerset. The opposition politicians referring to, of course, with Nigel Farage, whose bank account was closed not because he was a PP, not because of commercial reasons, but because it's views did not align with the values of Foot's bank, a thinly veiled political discrimination.
Jacobrey Small not for public figures.
I don't think we should be protected by them. But you are entitled privacy by people with whom you have a specific commercial relationship in your bank, and doctor must be two of them, and if she has broken that code, she is not fit to run a bank.
We could find out who.
Have spoken very vocally on this issue, and which is you needs to keep those people on side, and that's why I think he has kind of weighed in so strongly on this issue and yes effectively put that extra pressure on Rose to go and made this a big issue, perhaps more of an issue than the public might think it. You know, warrant's important. We're talking about a relatively small number of people here who are losing access to accounts.
In case anyone doesn't know who Coots is or who they are, they are bankers to the rich and to royalty. King Charles's bank account is with Cutes, and they do have rules about how much cash you've got in order to have a bank account. And so you know, that defense that they initially made on removing his bank account, or the story that he didn't have enough funds, on
the surface, could be entirely believable. But in fact, if it's the politics here that has taken over, I mean paul is Allison Rose really just a victim of the political backdrop here. Rather than say for what she did, should she have lost her job.
I mean she's lost her job for admitting to explicitly speaking about an individual a client of the bank, which
obviously you really shouldn't do. Throughout Deutsche Bank's troubles with banking President Trump, they were very stern about not making sort of major statements about Trump or why they banked him or how they banked him, and so on and so forth, And I think she crossed the line there, which was a terrible mistake and part of a much bigger mismanagement of this whole situation, which meant she had
to go. But the problem for nat West here is that they've been fighting this battle which has become a political battle, but to my mind, isn't really about the politics at all, certainly not about Nigerl Farrag's politics with one hand tied behind their back, because they can't reveal a lot of stuff about what the profitability of Nigel Farag's banking relationship with Coots looked like, either before he repaid his mortgage, which was the kind of the precursor to ditching him as as a client.
Or after.
And I think Farag has like people have asked him to say that they can release some more details about his account his banking with them, to kind of show more detail about the story, and he's refused that. Obviously the bank can't do it of its own accord, So we're left with sort of half the story really from that West points of view, but really from the point of view of Alison Rose and the board and how they handled this, they made some fundamental errors of judgment.
They knew that ditching Farrag as a client was going to create a massive media storm, and they've stumbled blindly into this as if they had no idea it was coming.
How is it allowed to rumblong for so long? Obviously Alison Rose knew what she said to the BBC journalist, and then for the bank to deny that that was the case. It was always going to come out in the end, wasn't it, Harry.
I mean, it's one of those classic things. It's not necessarily action, it's to cover up, and in this case it looks like they've fallen into that classic trap there. It's interesting that in the report itself which Farage is released, one of the things that comes across again and again is the bank actually knowingly stating and there that dropping him will be a big issue for the bank. And yet, as Paul says, they seem to have been incredibly naive
when they did it. The expected on the one hand, as he would cause a lot of trouble and would make a media storm about it, but then don't seem to be prepared for it, which is quite remarkable. And I mean, for that sort of media management alone, you just have to think this level of incompetence going on there is quite staggering. I admit they probably didn't expect it ever to get like this, and maybe even Nigel Farage didn't, but once it happened, they just seemed pretty clueless.
It's slightly astonishing when you step back and think about the motivations to make that move to remove his bank out. As you said, there was an internal debate clearly at COOTS about the fallout from this, and yet they did it anyway. What possible motivation do you think internally at NatWest could there have been for this? How could they score such a spectacula own goal?
Paul Well, I think what's clear from all of the reporting around the details that have been released about this reputational risk report, how Farrage was assessed and what they thought about him, is that, Okay, so there's a lot of pretty colorful language in there about how he's xenophobic, and lots of things about his politics and even some of his business dealings, which is very unwise stuff to include in a corporate report, almost certainly, but it strikes
me that the main thrust of what is going on here is the bank talked about its values now call me cynical, but I think of corporate value the set of corporate values, as being about the brand and the image that they want to present. It's not about deeply
held religious or beliefs or anything like this. And what they're really worried about with a very high profile campaigning media provocateur as a client is that he's going to say a bunch of things which is going to reflect badly on their reputation with all of their other customers and their staff, which is a very common and ordinary assessment that lots of companies make all the time. Banking is slightly different because you have to provide basic banking services.
But this wasn't about basic banking services. Wasn't about an ordinary person sitting in their bedroom and saying some unfashionable things on social media. This is about a media provocateur who was known to be a client of Coots and the reputational risk entailed for the bank, and also the fact that he'd repaid his mortgage and was therefore bringing in less revenue while still being potentially high cost.
He really is the arch media provocateur of Britain. And as I said, you know, the disruptor of the establishment, and he was making the argument in recent days that you know, the establishment was trying to throw him out of Britain by debanking. I mean, presumably he could have just gone along, trotted along to Lloyd's or HSBC and opened another bank acount. I'm not sure you need a Coots bank account perhaps to stay in Britain. But Joe,
what does Ferrage do next? How do you see his next move on the great media stage after this victory that he's had.
I mean, on your last point, David, you kind of wonder if you're a bank today and Nier does come and say please can I have an account? You look at all this and you think, oh, I might not be We might think twice at whether we want to take this person or as a client because the reputation or risk that that Paul just talked about. It does what Nigel Farage does next, It's always an open question. Will he set up another party, Will we have another go at trying to become an MP and leading that
movement again? We know he has support in that world, as you say, a very influential figure in that regard. He is always keeping us guessing. Nigel faraes he has that media profile, that personality, but it's hard to say. I must say Richard Tyson and running a reform could nudge Faris come back there to see.
We're going to have an election in Britain next year and as you mentioned earlier, Joe, part of the government's maneuvering on this is to try to plicate the wing of the party or their supporters who are a bit more sympathetic to Nigel Farage's politics. Is he going to play a bit of a bigger role perhaps in the election that is coming than perhaps we previously thought.
I would not rule that out. I mean he's affectedly done it at the last two to three general elections and no, Richids Unit is in a difficult position in the polls and so and he cannot afford to have a stroke effectively, very right wing party contesting seats up in the red wall across the UK, they would lose votes, the consertive body would and that would cost them. So yeah, that's why it's Unaike is so concerned about this, Harry.
What next then? For nat West it's one of the biggest brands in banking in Britain. It's now without a full time chief executive. They've appointed an interim CEO, but what does the next year hold for nat West and who is most likely going to sit in the chair as the chief executive from here on.
Well, in banking and many sort of businesses, the interims do have a habit of becoming permanent CEOs. And so you know, we saw the same situation at HSBC not so long ago when they got rid of their CEO.
The the interim ultimately became the permanent CEO. So Paul Faite, who's replaced Alison Rose, on an interim basis, would look pretty set fair as long as he does a reasonably decent job of probably becoming the next CEO, certainly in part because banks, like all businesses, want to minimize the amount of disruption, so you don't want to really have three CEOs in one year. So if you can keep it to two, and if Fait bruce up to the task, then I'd say he's in with a very good shout.
Yeah, what do we know about Porthwait? It's probably unknown to most people listening to this.
Well, frankly, he's pretty unknown to me before today. But he basically he's a commercial banking guy, so he's ahead of their commercial banking and institutional banking business has been since twenty nineteen, when he took over effectively Allison Rose's old job when she got promoted to CEO. Before that, Actually, there isn't too much on his CV that we actually
sort of know about. It seems like he might have been in transaction banking, but us going back before then, it's a bit of a sort of a black hole moment which obviously we will hope to fill in over time, and which presumably now West will want to fill in if they want to make the case that he should be their next CEO.
Paul, are there any wider ramifications for banking in Britain after this?
You know, the Farrage versus Coots case is really not very widely appickable because it's about, you know, high value, high cost services to a high visibility, high profile client. The vast majority of people that are not in that sort of situation at all. There is a problem with some people not getting the access to the banking services that they require in the UK as there is in the US, and a lot of that is to do with people being just too poor or lacking financial education,
and this sort of thing. Some politicians have claimed that ordinary individuals are being kicked out of banks for saying things, even just on social media, that somehow we're all being tracked for our political views. I mean, I've seen literally no evidence of this anywhere in any kind of news reports that I can think of, or in any kind of like regulatory reports or any even sort of you know, zones of investigation that conduct regulators are thinking about digging into.
I mean, I guess they'll look at it now. There might well be a whole bunch of people who come forward and make these kinds of claims now, and if there are, then it's worth investigating properly. But I don't imagine that many banks are really expending that much time and money on researching, you know, my mum's social media account to work out whether or not she might be a bit mad or say some crazy things, you know.
Right again.
In that tweet, though, far shays we need both cultural and legal changes to a system that has on fairly shot down many thousands of innocent people, and I will do my best to be their voice in the Brexit debate. Of course, he managed to tap into this feeling that people have been left behind by the current system. He seems to be trying to drive another wedge in the system here again on this particular issue, and at least
for now, the government has seemingly agreed. You know, we've talked a lot on this podcast about the different tone from the Rishi Sunac Jeremy Hunt administration in terms of friendliness to business. Joe, might this be a bit of a turning point in terms of kind of the political battle lines being drawn for the election, This idea of kind of the system and who is standing up for ordinary people against say the City of London.
He talk about lessons learned, David. We had Andrew Griffiths on our UK Politics podcast and he made exactly this point.
Clearly, this was a very serious matter in a democracy. It's fundamental that people can have for confidence that they continue their banking relationships, regardless of what they say or the political views or party that they support, which is why it's important that the board acted. That change has happened. We now need to go forward and make sure that we can learn those lessons and make sure importantly that this does not happen again.
He was really leaning into it. He was saying letters needs to be learned across the whole financial sector want banks to look at themselves and ask themselves, are you
denying services based on free speech? So it's definitely something where the government is trying to create a wedge, and if anything, we pick up a sense from within the Conservative Party that their move at this point to give themselves the best chance of winning the election is to really lean into these wedge political issues that they can kind of make hay out of, where it's not really about public so or the NHS or cost of living or you know, these issues that you might think are
kind of bread and butter realities for the public. It's instead taking political dividing lines such as the war on woke for example, or these kind of cultural issues and really trying to kind of paint yourself as a complete opposite to labor and on the side of working people and what the kind of common sense view of politics is. That really is a strategy we can to seem more
and it's not sun acts. I don't think he's naturally comfortable with doing it, but he recognizes that they do something to try and turn this pole gap around, and that's why we're seeing this kind of more aggressive stance they're taking on these issues, and this is this is a perfect one form that they've made this about free speech, when really it probably isn't too much about free speech, and we've talked about but they wanted to make it like that, and that suits them.
Politically, I guess also chief executives up and down the country we'll be looking at this and thinking, if I'm sat next to a journalist at a dinner, maybe I shouldn't talk to them very much. I mean, Harry, isn't this really just a story about somebody misspeaking and being a little bit too loose lit when sitting next to a busines this reporter.
Well, I suppose the point to make is actually the way Rose has left the bank isn't so much the sort of exception but rather than rule. I mean, you know, an awful loss of bank CEOs don't leave banks by their own volition. You just have to look in the UK, for instance, Barclays, where you know barely any CEO has ever sort of left that place of their own volition, and you know equally the same could be true of many other banks. So frankly, you know, if the old
saying is every career in politics ends in failure. Well in banking, it's sort of somewhat similar for CEOs. It's kind of like football management. You know, people rarely see out their time and sort of have Alex ferguson s career, you know more than likely you sort of more we're going to be in the sort of Jose Marino sort of constant turn.
On that note, I think we'll wrap it up. Thank you so much to Harry, Paul and Joe.
Thank you.
Thanks for listening to this week's in the City. We'll be back next week, but in the meantime, if you like our show, please head on over to Apple Podcasts or wherever you listen to podcasts and rate, review and subscribe. This episode was hosted by me David Merritt. It was produced by Somersadi, with additional editing by The Lake Maples and special thanks to Harry Wilson, Paul Davies, and Joe Mays.