NatWest chairman says political fallout of Farage storm forced out chief executive

UK government intervention appeared to seal Alison Rose's fate, after sources at the prime minister's office and the finance ministry briefed newspapers late on Tuesday evening they were not happy with her remaining in post

NatWest CEO Alison Rose resigned on Wednesday amid the fallout of the Nigel Farage storm.

NatWest chairman Howard Davies said political pressure ultimately led to the shock departure of chief executive Alison Rose, as the bank battles to contain the fallout from a damaging clash with former Brexit party leader Nigel Farage.

Britain's biggest business bank has faced severe criticism for mishandling the closure of Farage's accounts with its private bank Coutts, after a dossier emerged showing a bank committee had said his views did not align with the lender's own.

Ms Rose stepped down on Wednesday after admitting to a "serious error of judgment" in discussing Mr Farage's relationship with the bank with a BBC journalist, while Coutts chief executive Peter Flavel was ousted a day later.

Mr Davies said he intended to stay on at the bank for now — after also facing calls to resign — and confirmed for the first time that political pressure forced the board's hand in Ms Rose's exit. 

"The political reaction to that was such... that her position was then untenable," he told reporters. "We've lost a great leader," he added.

NatWest is nearly 40% UK taxpayer-owned following its bailout during the 2008-2009 global financial crisis. Britain's finance ministry said the decision for Ms Rose to depart was made by her and the bank's board. 

"The NatWest board is responsible for the bank's strategic and operational management," a UK Treasury spokesperson said. 

'Exceptional circumstances'

While the UK government has long described itself as an "arms-length" investor and Mr Davies said it had not interfered in commercial decisions during his eight-year tenure at the bank, he noted the "exceptional circumstances". 

He said it would "theoretically" have been possible for Ms Rose to continue despite the UK government's position, but they had both concluded that "maintaining the position of the bank and her authority in the bank would just be too much of a struggle".

Mr Davies has himself come under pressure, with one top-20 investor telling Reuters his position looked increasingly shaky after the board backed Ms Rose on Tuesday evening, only for her to leave hours later.

UK government intervention appeared to seal Ms Rose's fate, after sources at the prime minister's office and the finance ministry briefed newspapers late on Tuesday evening they were not happy with her remaining in post.

Mr Davies said his plan remained for him to leave in 2024, as announced in April.

"I serve at the behest of shareholders and will continue to do so, it is important there is some stability in the bank," he said. 

NatWest said it had appointed the law firm Travers Smith to undertake an independent review into the account closure arrangements at Coutts. 

• Reuters