Yet another apology from NatWest. Sir Howard Davies apologised today for the uncertainty created by recent events but insisted he intends to stay on as chairman despite several big investors claiming he should walk the plank.
But Davies brushed aside such concerns. He added that he has full backing of NatWest’s biggest shareholder – that’s indirectly you and me as the taxpayer – which is a big step forward as only yesterday the Prime Minister was not willing to give his full confidence, at least not publicly.
Speaking to the press this morning after NatWest announced half-year profits, Davies added that the board had also agreed to the terms of reference for an independent review into the handling – or should one say – mishandling of Nigel Farage’s accounts at Coutts.
The only surprise there is that the board didn’t announce such a review weeks ago when the Farage-debanking scandal first broke. If Davies – and indeed Dame Alison Rose, the chief executive who was defenestrated in the early hours of Wednesday morning – had made that decision weeks ago after Farage first went public with the 36-page dossier, they may have contained the scandal.
Instead, by ignoring Farage on the rampage, they lit a tinder keg, one which blew up in their faces after Dame Alison admitted publicly that she was behind the BBC story that the ex-Ukip leader’s account was closed for “commercial reasons.” That was only part of the story. But that’s not the point: Dame Alison broke the very first rule of banking which is client confidentiality. Once she had made that admission, there was only way for her to go and that was out.
If Davies had really been as smart as everyone makes him out to be, he would have called in Farage then for a chat, along with the now ex-boss of Coutts, Peter Flavel, banged heads together, sorted out the whole affair.
But by ignoring such a hot potato as Farage – allowing him to run the public debate and indeed to widen it out into the broader issue of freedom of speech – NatWest has landed itself in at the deep end.
Luckily for Davies today, he was able to deliver some good news for investors, including the taxpayer. NatWest beat all the City forecasts, making operating profits of £3.6bn for the first half of this year. That’s hardly difficult to do, though, in an environment of rising interest rates.
So it will now be paying £500m in half-year dividends to its shareholders including a nice £190m pay cheque for the UK government. NatWest’s shares recovered from a brutal selling off this week, climbing back to £2.47 but they are still off their best. And they are likely to stay depressed so long as the fear of legal action – not just from Farage but other customers who have been debanked – weighs so heavily.
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