NatWest’s ‘sure touch’ chief Alison Rose forced to quit over Farage error

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Dame Alison Rose’s decision to step down as chief executive of NatWest after admitting that she had leaked confidential information about former Ukip leader Nigel Farage would be stunning in itself.

But the news is particularly striking given her reputation as a ‘sure touch’ banker who has received plaudits and honours from the government.

After joining Royal Bank of Scotland as a graduate in 1992, she held roles including chief executive of its commercial and private banking division — the department that then included Coutts, the bank for high-net worth customers where Farage held an account.

Known as being more low-key than her predecessor Ross McEwan, Rose has long focused on gender and representation and was commissioned by the Treasury in 2019 to lead an independent review of female entrepreneurship.

Later that year she was appointed as RBS chief executive before it was renamed as NatWest in 2020.

While largely following McEwan’s strategic focus on making the bank a profitable, UK-focused company, she also sought to burnish its environmental credentials. In February 2022 the lender announced that it would stop doing business with its most polluting clients that lacked “credible” plans to decarbonise.

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“I really respected Alison as a role model in financial services,” Lloyds Banking Group chief executive Charlie Nunn told journalists on Wednesday. “Some of the leadership, especially around topics like sustainability and female entrepreneurship, has been great. I’ll miss her in that context.”

Rose’s fall from grace is heightened by her close work with the government. In February she was appointed as co-chair of the Energy Efficiency Taskforce and she was appointed Dame Commander of the British empire in the 2023 New Year honours list.

She also oversaw the end of majority government ownership in the bank that had been in place since the £46bn rescue of RBS in 2008. The Treasury’s stake has fallen to less than 40 per cent from 62 per cent when she took over.

While NatWest’s share price remains higher than when Rose took the top job, the shares are down more than 20 per cent since their peak during her tenure in January, hit by both industry-wide fallout from the collapse of Californian lender Silicon Valley Bank and the Farage controversy.

Howard Davies, NatWest’s now embattled chair, said at the company’s annual meeting in April that he “would have hoped the share price would have been even stronger but that’s the way banks are valued at the moment.”

Rupak Ghose, an adviser to fintech companies and former financials research analyst, said that Rose had done a “steady but not transformative job”.

Benjamin Toms, an analyst at RBC Capital Markets, said that like other lenders, NatWest had benefited from the Bank of England’s efforts to fight inflation, with the base rate reaching 5 per cent in June.

“It’s slightly difficult to dissect what’s underlying performance, but I would say that the Ulster [Bank] transaction has gone relatively well,” he said, referring to the group’s decision to pull out of the Republic of Ireland to focus on the core UK market.

He added that moves to reduce fossil fuel financing were easier for NatWest and Lloyds, the UK’s other major domestically focused banks, as they had lower exposure than rivals such as HSBC or Barclays.

“At the end of the day, it’s easier for them to comply,” he said. “Some of [NatWest’s] disclosures are better than their peers, but I’d say they’re coming from an easier starting point.”

Rose’s departure followed her admission that she inaccurately briefed a BBC journalist about the reason Farage’s account had been closed — a second major public error this year.

In February, she had to perform a U-turn after telling the House of Commons Treasury select committee she was “too busy” to attend a hearing on savings rates.

“There was a series of unforced errors that were obvious,” said one analyst. “If you asked a 5-year-old the question — the government owns 40 per cent, they want to see you in front of parliament — they would get it. They’re your number one client.”

While the choice of Rose to lead the bank four years ago came as part of orderly succession planning, NatWest has had to move fast to replace her, putting commercial and institutional bank head Paul Thwaite in as interim successor. However, observers said the fact the bank was in a moment of stability should help it weather the sudden switch of leadership.

“Unexpected management changes are unhelpful, but it is not as if NatWest was in the early stages of a new strategic plan, or that an obvious strategic pivot was/is set to occur,” said analysts at Citi, adding that this “should provide some comfort to shareholders”.