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LONDON (Reuters) – NatWest’s departing CEO Alison Rose until recently told colleagues she had weathered more than her fair share of crises, steering the state-backed lender through the COVID-19 pandemic and market fallout from war in Europe and chaos in Westminster.
But ultimately it was committing the cardinal sin of breaching the confidence of a client, former Brexit Party leader Nigel Farage, that cost her her job.
NatWest lifer Rose climbed up the ranks over more than three decades from graduate trainee to boardroom, becoming the first woman to run one of Britain’s major banks.
Widely lauded for her work promoting female entrepreneurship and action by the industry on climate change, she received a damehood for services to banking and was a close adviser to the British government.
But over the past 10 days, a string of damaging revelations about the decision by NatWest’s private bank Coutts to close Farage’s accounts partly because his views did not “align” with the bank’s drew widespread condemnation, including from Prime Minister Rishi Sunak, who previously leaned on her advice.
“Character reputations are pretty volatile,” said Rupert Younger, founder of Oxford University’s Centre for Corporate Reputation. “You can be a hero one day, a zero the next, as Alison Rose has found out.”
The role assumed by Rose as agent for change in a sector historically driven by greed was not enough to save her, just days before Britain’s top financial regulator imposes strict new rules demanding paramount protections for consumers.
Despite initially securing the backing of her board, led by veteran industry figurehead and former regulator Howard Davies, Rose’s resignation was announced early on Wednesday.
Davies lamented the “sad moment” while Rose paid tribute to colleagues who had helped her build solid foundations for the bank, in a statement accompanying the news.
Charlie Nunn, the CEO at rival lender Lloyds Banking Group (LON:LLOY) described Rose as “a role model” in financial services, in a media call after the bank’s first half figures on Wednesday.
Questions abound whether the sudden shake-up to leadership at Britain’s biggest lender to small businesses – around 40% owned by the taxpayer – might distract from its objective of keeping credit flowing into a UK economy and mortgage market already reeling from 13 consecutive base rate hikes.
“The big problem for the UK government is not its stuck ownership of this bank, but the self-inflicted long-term economic damage of Brexit,” said a former NatWest employee, who declined to be named.
Farage has called for further heads to roll in the wake of Rose’s resignation.
“Others must follow,” he said in a post on social media platform X, formerly known as Twitter.
“I hope that this serves as a warning to the banking industry,” he said, pledging to speak up for others who claim to have been “de-banked” on political grounds.
He had earlier rejected the bank’s apologies for impinging on his rights to freedom of expression.
On his eponymous show, which aired on GB News on Tuesday, he declared Rose unfit to run the bank and branded the lender’s missteps as evidence of broader, fundamental failures in UK banking.
RBS (LON:NWG) TO NATWEST
Rose succeeded Ross McEwan as CEO of NatWest in 2019, becoming the lender’s first female boss.
She picked up where McEwan, and his predecessor Stephen Hester, had left off, stabilising the bank’s balance sheet, eliminating risks and revamping strategy to focus on supporting small UK businesses and households, in stark contrast to the sprawling institution cultivated by ex-investment banker Fred Goodwin on the eve of the global financial crisis.
The journey was not without its struggles.
The bank was the first in Britain to be hit with a criminal fine, for 265 million pounds, for failing to prevent the laundering of hundreds of millions of pounds, some deposited in bin bags at branches.
The COVID-19 pandemic struck, bringing financial misery to thousands of customers. But under Rose’s supervision, the bank became one of Britain’s biggest participants in government-designed loan schemes to keep ailing businesses afloat.
She presided over another vital step in the bank’s efforts to break from its ignominious past, after the tarnished Royal Bank of Scotland (NYSE:RBS_old_old) brand was ditched in 2020.
Efforts to repay the UK taxpayer for the 46 billion pound ($59.33 billion) bailout of the bank in the 2008-9 global financial crisis were stymied by erratic stock price performance, although a return to majority private ownership was secured in 2022.
($1 = 0.7753 pounds)
