NatWest's investigation reveals potential FCA rule violations
A NatWest review concerning Coutts bank account closures indicated possible violations of regulatory rules but found no politically motivated discrimination, the bank declared on Friday.
The controversy with ex-Brexit party leader Nigel Farage over Coutts closing his accounts escalated into a crisis this year, leading to NatWest's CEO Alison Rose and Coutts' former head Peter Flavel stepping down.
The audit, conducted by law firm Travers Smith, highlighted how Coutts could better handle account terminations and its communications with clients. It pinpointed potential infractions of Financial Conduct Authority regulations regarding fair customer treatment and contractual breaches for not properly justifying account closures.
The FCA will take the findings into account for its ongoing review of NatWest's operational procedures. The Travers Smith analysis assessed 84 client accounts from a recent two-year period, uncovering significant lapses, including the mishandling of Farage’s case. Consequently, Rose lost around £7.6 million in bonuses.
While the first phase concluded Coutts acted legally in Farage’s situation, primarily for business reasons, the second phase discovered an account closed ostensibly for misalignment with the bank's ethos, though not linked to political opinions.
Coutts CEO, Mohammad Syed, acknowledged the bank's service shortcomings and pledged to adopt the report’s suggestions. Farage urged NatWest to reevaluate their account closure processes, citing revealed deficiencies.
The audit, conducted by law firm Travers Smith, highlighted how Coutts could better handle account terminations and its communications with clients. It pinpointed potential infractions of Financial Conduct Authority regulations regarding fair customer treatment and contractual breaches for not properly justifying account closures.
The FCA will take the findings into account for its ongoing review of NatWest's operational procedures. The Travers Smith analysis assessed 84 client accounts from a recent two-year period, uncovering significant lapses, including the mishandling of Farage’s case. Consequently, Rose lost around £7.6 million in bonuses.
While the first phase concluded Coutts acted legally in Farage’s situation, primarily for business reasons, the second phase discovered an account closed ostensibly for misalignment with the bank's ethos, though not linked to political opinions.
Coutts CEO, Mohammad Syed, acknowledged the bank's service shortcomings and pledged to adopt the report’s suggestions. Farage urged NatWest to reevaluate their account closure processes, citing revealed deficiencies.
