Shocking Drama Unfolds: Coutts’ King’s Bench Ignites Explosive Free Speech Debate!

For more than three centuries, Coutts has quietly managed the finances of the UK’s richest people, from royalty to rappers.

However, the private banking arm of government-backed lender NatWest is now uneasy push into the spotlight after deciding to cut ties with one of the most divisive and combative figures in the country, Nigel Farage, former leader of the UK Independence Party and the Brexit Party. According to an internal Coutts memo that he obtained and released this week, this was due in part to Farage’s political views that were “at odds with our position as an inclusive organization.”

For a wealth manager who views competition and confidentiality as key selling points for the super-rich, weeks of hostile media coverage and outrage from politicians could hardly be worse for his reputation.

The reaction has included Prime Minister Rishi Sunak, who criticized the bank on Twitter for undermining free speech, garnering a “listen listen” response from the platform’s libertarian owner, Elon Musk.

Furore has gripped the NatWest leadership, from Coutts boss Peter Flavel to NatWest chief executive Dame Alison Rose and chairman Sir Howard Davies who are facing calls from MPs to appear in a parliamentary inquiry. Rose was forced to issue a humiliating apology to Farage and I promise a full review of the decision.

Farage’s campaign has also sparked a broader debate about the powers of banks and payment companies to exclude hundreds of thousands of people a year from the mainstream financial system with little or no transparency, particularly politically exposed persons or PEPs like the deputies.

It has also raised questions about a company’s right to dump customers when their personal views conflict with corporate “purpose,” particularly around diversity and inclusion.

“To me this is a very simple case of overreach and it is very damaging to them: they are trying to make a decision on some kind of broader social agenda without notifying customers,” said Rupert Younger, founder of Oxford University’s Center for Corporate Reputation. “You can apply values ​​and commitments quite reasonably to the people who work with you; it is completely inappropriate to apply them to your clients.”

The affair has already led the government to run new requirements for banks, forcing them to give a longer notice period and explain the reasons for closing an account. NatWest could face regulatory scrutiny over whether it violated anti-discrimination laws.

Coutts is an elite lender who tracks his history it dates back to 1692, when Scotsman John Campbell founded it as a goldsmith and bank in London’s Strand, quickly gaining royal patronage from Queen Anne.

It grew alongside the British empire, eventually becoming part of NatWest in 1969, which in turn was bought by Royal Bank of Scotland in 2000, before being renamed NatWest due to the toxic legacy of the RBS taxpayer bailout in 2008. The government remains the group’s largest shareholder.

Inside its headquarters, white-gloved waiters glide through wood-paneled dining rooms to provide silver service to aristocrats, billionaires and their families.

The bank has become synonymous with exclusivity in British culture. In particular, it requires potential clients to have at least £3m in savings, or £1m in investments or loans with the bank.

But Coutts is more famous for being the bank of the royal family. A former director of NatWest said the late Queen Elizabeth insisted that her family keep her accounts exclusively at Coutts, giving her full control over the House of Windsor’s finances.

Coutts has a checkered history of controversial clients. In 2005, a US Senate subcommittee found that his long-sold US arm was among the lenders who helped Chilean dictator Augusto Pinochet and his family hide $15 million.

In 2020, a banker in his Swiss unit was fined for ignoring warning signs and allowing Malaysian financier Jho Low to transfer $700 million into his accounts without notifying regulators. Low siphoned off up to $4.5 billion from Malaysia’s sovereign wealth fund 1MDB and remains an international fugitive.

Although the business was sold in 2016, Coutts is still facing litigation in Malaysia for failing to carry out proper due diligence on Low.

His latest scandal has attracted the most undesirable noise.

a file Prepared for Coutts’ wealth reputational risk committee and obtained by Farage reveals harsh criticism of his world view. “Continuing with the NF bank was [not] compatible with Coutts given his publicly stated views that were at odds with our position as an inclusive organization,” a memo read.

Another said Farage deliberately uses “extreme, hateful and emotional language. . . at best, he is seen as xenophobic and pandering to racists.”

Coutts has publicly maintained that he would not remove clients due to their political views and that “decisions to close an account are not made lightly and involve a number of factors including business viability, reputational considerations, and legal and regulatory requirements.”

Several people briefed on the process told the Financial Times that the trigger for discussing whether to continue to keep Farage as a client was a mortgage prepayment that caused him to fall below the £1m loan threshold; a point also mentioned in the record.

However, one of the people admitted that if Farage were a billionaire, it is unlikely that his views would have been enough to oust him.

As part of its modernization attempts under Rose, Coutts and its parent NatWest have leaned heavily in sustainability, diversity, equality and inclusion, establishing them as fundamental values ​​for the business. In 2019, Coutts became “B-Corporation”committing to better environmental, social and governance objectives.

While Farage acknowledges that his account fell below Coutts’ requirements, he said that it subsequently recovered and therefore alleges that the decision was purely political.

“That dossier is full of bile and prejudice. This is a big problem, it’s much bigger than one politician and Coutts,” Farage told the FT. “If you did a survey of NatWest’s 19 million customers, you would find a wide variety of views. Are you saying that all the Brexiters, all the Tories who disagree with the bank’s policy on diversity and inclusion should not be able to bank with them?

Once Coutts agreed to “an easy path out of NF” at the end of 2022, he made sure to brief his parent NatWest’s reputational risk committee “to make sure they don’t have any concerns with this.”

The report noted that “a decision to leave may result in NF using their GB News/social media platform to air their grievances (unless they are too proud or ashamed to post).” However, he concluded the “risk of negative publicity on the way out. . . It was accepted”; a judgment that one NatWest member acknowledged had not aged well.

The scandal now threatens the job of CEO Rose, and it comes at an awkward time for one of the most high-profile executives in the country. Just days before Farage published her dossier, it was announced that she was one of two bankers selected to serve on Sunak’s 14-member business council. She was also named a lady in the New Year’s Honors list for financial services.

“This obviously undermines his credibility,” said Samuel Johar, chairman of the Buchanan Harvey board advisory group. “Once the situation with Farage became public, the bank should have fixed the problem instead of being disingenuous about it.”

The rivals also point to the own goal that has been the matter. While many of Coutts’ clients are famous, from King Charles to rapper Stormzy, the former Ukip frontman is rarely mentioned among his clientele.

“What reputational risk was Coutts running?” said an executive from another financial services company. “Who the hell knew or cared that Farage was deposited? That’s the real ironic flaw in the decision to quit. They tackled a low or no reputation risk problem and made it a success!”

Additional reporting by Emma Dunkley and Siddharth Venkataramakrishnan in London