Over the last few weeks a new term has entered the English language: “de-banking”.
The expression refers to the withdrawal of services by a bank from a customer. It has become common currency as a result of the decision by Coutts Bank, a subsidiary of the NatWest, to close the account of Nigel Farage, the former UKIP and Brexit Party leader.
Mr Farage has held an account with Coutts for almost a decade. However, in November 2022, the bank’s “wealth reputational risk committee” met to consider a 36-page dossier of allegations about his conduct. It accused him of a range of supposedly unacceptable behaviour, including associating with Donald Trump and maintaining a friendship with the former Wimbledon tennis champion Novak Djokovic. All this presented, the dossier declared, “a material and ongoing reputational risk to the bank.”
The report recommended that the committee should “consider exit to coincide with the end of the mortgage term and on a long glide-path that reduces the risk of counter criticism.” The committee accepted the recommendation.
There is little doubt that the decision to de-bank Nigel Farage was made on political grounds. His views were considered by the committee to be “at odds with our position as an inclusive organisation”.
In this connection, it should be noted that Coutts is so inclusive that it requires customers to have at least £1 million in investments or borrowing, including a mortgage, or at least £3 million in savings. This is a matter of significance when one considers the actions of Dame Alison Rose, who at the relevant time was Chief Executive of Coutts’s parent company, NatWest.
On 4th July, the BBC’s business editor, Simon Jack, reported that “a source familiar with Coutts’s move” had told him that Farage had been de-banked because he “fell below the financial threshold required to hold an account at Coutts”. That was clearly untrue.
On 25th July, Alison Rose admitted that she was that source. A few hours later she resigned as NatWest CEO.
Rose’s resignation was entirely correct. Customer confidentiality is the bedrock of the banking system. A High Street branch counter clerk could, quite properly, expect instant dismissal for such conduct. The spectacle of the NatWest’s CEO trying to cling on, supported by the bank’s board, which had expressed confidence in her, was – to say the very least – unedifying.
In political terms, Nigel Farage is undeniably “Marmite”. It is extremely difficult to be neutral about him. But his treatment by the bank was indefensible.
In today’s world, a bank account is an absolute necessity. Arguably, it is as much a utility as an electricity or water supply. It is almost impossible to get by without one.
Provided funds have been lawfully acquired and the account is not being used for an improper purpose, a bank should not be able lightly to strip any customer of banking facilities.
That is true not only in the case of Nigel Farage, but also in the case of each and every one of us.