Sir Howard Davies was preparing to leave NatWest in triumph. After serving eight years as chairman of the FTSE 100 lender, the Manchester-based economist announced in April that he plans to step down from the position by July next year.
Despite attempts to revive the bank's share price, the Grand City's performance is widely regarded as a success: returning a controlling stake in NatWest to private ownership; carrying out large-scale restructuring; and control over profitability.
But Coutts' decision to “lose the bank” of Nigel Farage because his views were at odds with the “values” of the lender dispelled any hopes Sir Howard had of sitting out the rest of his time at NatWest.
While the group is looking into the processes at Coutts, a private bank owned by NatWest, questions remain about who gave the BBC personal information about Farage, and some even question Dame Alison Rose's position as chief executive.
Nigel Farage's bank account history
With Sir Howard as chairman responsible for overseeing the bank's management as well as the performance of its executives, his last tenure as a lender is likely to depend on Farage's fallout.
How will a 72-year-old man cope with the crisis?
Before taking on various leadership roles in the city, Sir Howard was a regulator, served as deputy governor at the Bank of England, and then became the first chairman of the Financial Services Regulatory Authority (FSR), the forerunner of today's city watchdog.
In a 2001 interview, Sir Howard laid out his vision for the FSR, which was created by Tony Blair's Labor government. He said: “What worries me is that people don't realize the fact that we're going to be a major reform regulator in the next few years.” Instead, he said he wanted the FSR to go after “real scammers who deal in insider information.”
He also expressed his opinion about the honorary title awarded to him: “I don’t use all this. Not in any aspect of my life, except for the newspapers, which relentlessly insist on it. I just don't like it. I know it's a strange thing. We receive no correspondence from anyone addressed to “sir and lady”.
After leaving FSR in 2003, the cycling enthusiast and Manchester City fan became director of the London School of Economics, but resigned in 2011, admitting that the university's reputation had “damaged” after receiving a £1.5 million donation from Saif al-Islam, Colonel Gaddafi's son. there were no sanctions against the Libyan regime.
Sir Howard has held senior positions at FSR, the London School of Economics and the Phoenix Group prior to NatWest. Photo: Eddie Mulholland
Sir Howard's first major City job began in 2012 when he was appointed chairman of the London-listed insurance company Phoenix, and in 2015 took up his current position at NatWest.
The bank's board of directors, led by Sir Howard, appointed Dame Alison to the top post at the end of 2019, making her the first woman to lead a major British lender.
He said at the time, “She has extensive experience and a successful track record from her previous positions at the bank. After a thorough internal and external process, I am confident that we have selected the best person for the job.”
But the Farage saga has cast doubt on Dame Alison's leadership. She apologized to Farage last week for closing his accounts, but questions remain about who leaked his bank details to the BBC.
Earlier this month, the broadcaster's business editor Simon Jack revealed that the accounts had been closed because Mr Farage didn't have enough money, but The Telegraph later reported that the decision was due to his views being inconsistent with Coutts' “values”.
It also emerged that Dame Alison and Jack sat next to each other at a charity event the night before Jack broke the Farage account story.
The pressure escalated last week when Boris Johnson called on Dame Alison to resign if she was found to have leaked details to the BBC and urged ministers to investigate the leak.
NatWest declined to comment on the former prime minister's column.
On Monday, both Jack and the BBC apologized to Mr Farage for his “incomplete and inaccurate” reporting. Jack added that the story came from a “trusted and highly placed source.”
The information on which we base our report on Nigel Farage and his bank accounts comes from a reliable and highly placed source. However, the information turned out to be incomplete and inaccurate. Therefore, I would like to apologize to Mr. Farage.
— Simon Jack (@BBCSimonJack) July 24, 2023
However, not everyone in the city believes the government should intervene in the fiasco.
Gary Greenwood, Banking Analyst at Shore Capital, says: “It's certainly clumsy management, but banks are afraid to do the wrong thing given the significant regulatory fines they've faced in the past and could face in the future for violating the rules.”
He adds: “Therefore, they have to walk a tighter tightrope in this respect. However, these are still independent businesses and should be allowed to choose which customers they will deal with just like any other independent business.
“Ultimately, I just think this will result in lenders having to be more explicit about their customer criteria and show meticulous processes when those criteria are not being met. I doubt that something like this will lead to the resignation or dismissal of Alison Rose.
The head of one city adds: “I think it's likely that Alison Rose probably didn't know about the Coutts report. I think it's pretty crazy that she's being called out.”
The next steps in this saga will likely come when NatWest's internal review of Coutts' processes is completed, reporting to Ms. Alison, not Sir Howard.
Howard, however, Farage has promised to find out who's behind the leak, which could threaten to turn the saga into a full-blown scandal.
Speaking to GB News last week, a leading Brexiteer said: “May I ask you, Dame Alison, was that you? Did you violate the privacy of my private banking? Did you say that to Simon Jack?
“Well, I'm going to find out, because today I sent another access request, this time to the NatWest bank, and in particular, I'm looking for any personal correspondence, Dame Alison, that concerns me. So in 30 days we will know the absolute truth.”
This is where Sir Howard and the rest of the board, who have not yet commented on the Farage saga, will play a decisive role.
Sir Howard, usually outspoken, usually struggled to get along with the former leader of UKIP. Last year, he called Brexit a “serious mistake.”
But since his time at the London School of Economics, Sir Howard has learned firsthand that some contradictions can't hold up to leaders.
If the insider's identity is eventually revealed to NatWest or Coutts, this time he may make a fateful decision.
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