The Daily Telegraph - Saturday
NatWest races to prevent more debanking scandals in future
NATWEST has rolled out new debanking rules to prevent a repeat of the crisis that engulfed the lender last year.
Chief executive Paul Thwaite said draft laws compelling banks to give customers three months notice before shutting accounts had been introduced ahead of schedule.
The laws, which extend the notification period from 60 days to 90 days, are set to come into force after summer but NatWest introduced them internally in January to get ahead of the legislation.
Chancellor Jeremy Hunt introduced the proposals after staff at NatWest’s private bank Coutts internally decided GB News presenter Nigel Farage’s views did not “align” with the bank’s own values “as an inclusive organisation”.
The crisis triggered the exit of former chief executive Dame Alison Rose after she admitted discussing the case with a BBC journalist.
Mr Thwaite said: “I’m pleased to say we’ve already implemented the extension of notice periods from 60 to 90 days ahead of the draft legislation being implemented. I was very keen as a bank that we implemented that as quickly as possible.”
After the scandal, a report by law firm Travers Smith found several failings in how NatWest had dealt with cancelling customer accounts and proposed a number of changes.
Mr Thwaite said he was “absolutely committed” to rolling out the proposed changes as quickly as possible.
“For the avoidance of doubt, we don’t exit anybody for their legally held political beliefs or values,” he added.
NatWest said yesterday its operating profits fell to £1.3bn for the three months ending March, compared with £1.8bn in the same period last year. However, this was ahead of City expectations. The fall was attributed to a slower mortgage market last year as borrowers paused applications owing to uncertainty over rates.
Mortgage demand between June and December was down, forcing intense competition between lenders playing in a shallower pool of borrowers.
NatWest decided to step back from the market and refused to offer lower prices, which dented its mortgage lending. Mortgage loans fell to £5.2bn versus £9.9bn last year.
Mr Thwaite said mortgage demand had picked up this year and higher lending levels were set to flow through later this year.
A Tell Sid style retail share sale is being planned to sell down the Government’s financial crisis era shareholding in the bank. The taxpayer’s stake has fallen from 46pc at the end of 2022 to below 28pc this year. A retail offer could come as soon as June, but NatWest emphasised any decision would be in the hands of the Government.
Mr Thwaite said: “If the Government did proceed with a retail share offer, there’s obviously a number of key activities that we need to be prepared for, whether that’s the preparation and issuance of a prospectus, or the potential for a large number of retail shareholders when that transaction completes. We are taking the necessary steps and measures to be ready for that.”