In the red: After the Farage scandal, it is right for Coutts CEO Peter Flavel to go

Even by the lamentable standards of UK banking, it’s difficult to think of anything as cack-handed as the Coutts management of the Nigel Farage debacle.

It’s so bad as to make you wonder, goodness: if this is what we know about, how bad could it really be, in relation to the events of which we have no knowledge? In a matter of a few weeks, the reputation of a bank that lorded over everybody from Dracula to Emma Watson in its 300-year history – used to serving the wealthiest sliver of society – has been well and truly rubbished.

When someone pays on a Coutts card now, instead of being impressed – as they and the bank would like you to be – you’re likely to snigger and refer to the ex-Ukip leader. To say that the bank got itself into a terrible mess is an understatement.

In theory, Coutts was well within the rules to decide that as a high-profile political person, it did not want Farage’s custom. Others, we know, have been similarly refused by other banks. This, though, is normally because there might be questions over their funding – such as whether they’re susceptible to receiving laundered cash.

Coutts clearly took the view that they did not like Farage, that many of their staff and customers would be opposed to his beliefs, that the bank did not want to be held in association were he to name-drop their brand, or flash their plastic. In the “woke” era, they may have been afraid that people would criticise them for having him as a client.

After all, they seem to have concocted a reason for Farage having to go. A 40-page report was prepared on his life and times. It was little more than a Wikipedia entry in terms of authority and scope – and included, for instance, the observation that he’s a friend of the anti-Covid vaccine tennis superstar Novak Djokovic.

Then, once he got hold of the document as he surely was always going to – and they ought to have realised so – via a Subject Access Request, they tried to say it wasn’t that, but a question of his finances. At this juncture, alarm bells should have been shrieking along Coutts’s thickly carpeted corridors. This was breaking every rule in the book about banking confidentiality.

Incredibly, the source for this information was not a junior banker who ought to have known better, but Dame Alison Rose, the chief executive of NatWest, Coutts’s parent company. Dame Alison has quit.

She could claim, with some justification, that Coutts’s dealings with its individual clients are well below her station; that she was running a mammoth financial services group. One person who could not say that, however – hand on heart – was Peter Flavel, the CEO of Coutts. He must have known – and if he didn’t, he should have done.

It is entirely right that he has now stepped down and Mohammad Kamal Syed has stepped into the role of interim CEO. Flavel maintained silence for too long. Your bank is engulfed in crisis and you, the chief, do not say a word? On leadership grounds alone, in terms of reassuring employees and stakeholders, it is right that he pay the price. His position had become untenable. They now need a new, safe pair of hands to restore trust.

Someone told Dame Alison about Farage’s finances. Usually, when it comes to the typical hierarchical reporting line, that would have been the CEO of Coutts, to the CEO of NatWest. That would suggest Flavel. But even if it was not and it was another, then Flavel is still not off the hook. He has been running a bank that makes claims of discretion and privacy, yet its reputation is tarnished.

If you’re a Coutts customer and you’ve chosen the bank for the level of service it provides – and that includes confidentiality at all times – you would be forgiven for questioning them. More so if you’re well known, a celebrity, as many of its clients are.

Flavel and his team have damaged the famous bank. Upon his departure, they now need to regroup to make anyone banking – or contemplating banking – with them regain the trust that was built over several centuries of impeccable banking. Because once that trust is broken, there is nothing left – no reason to use Coutts, as opposed to any other bank. That’s why Flavel had to go, to quickly restore that bond.

There are those who say they should not give succour to Farage; that neither Coutts nor NatWest is required to dance to his publicity-seeking tune. But as I see it, this has gone too far to be rowed back. The damage has been done.

The argument could be made that as CEO, Flavel was not party to compiling the report or dropping Farage; that he should stay and right the ship. But that doesn’t wash.

Much of what occurred to undermine the bank took place later, after Farage began his crusade. The lack of explanation, the lateness of any form of apology, all fall to the CEO. Flavel has followed Dame Alison out of the door. Good.