NatWest group’s decision to close Nigel Farage’s accounts at its private bank Coutts was lawful, but there were “serious failings” in its treatment of the former Ukip leader, an independent review has found. Lawyers hired by NatWest determined that Coutts had a “contractual right” to shut Farage’s accounts, and had done so because the bank was losing money by keeping him as a client. While Coutts also considered that there was a reputational risk of keeping Farage as a customer, it had not discriminated against him, despite raising concerns that his views on issues including migration, race, gender or Brexit did not align with its own, the law firm said. “Coutts considered its relationship with Mr Farage to be commercially unviable because it was significantly loss-making,” said the report by the law firm Travers Smith, and added that it was “highly probable that the exit decision would not have been made had Coutts deemed the relationship with the client to be commercially viable”. However, Travers Smith identified “a number of shortcomings”. It condemned the tone of internal documents obtained by Farage in July, which suggested the bank was concerned about his alleged “xenophobic, chauvinistic and racist views”. Travers Smith said these excerpts, which gave the impression that the decision was driven by reputational considerations, were “inappropriate and ill advised”. And while NatWest had acted in a “lawful” manner when deciding to shut his accounts, it had “failed to treat him fairly” by not adequately explaining why it was ending the relationship; the fact that his accounts were discussed with the BBC; and that NatWest did not take steps to address the “false impression” circulating in the media regarding Farage’s financial affairs. The Financial Conduct Authority said it was reviewing NatWest group’s governance, systems and controls, given that the Travers Smith report highlighted “potential regulatory breaches” and a need for improvement in areas including how the bank considers the potential closure of accounts, handles complaints from customers, and the effectiveness of its governance mechanisms. The law firm conducted 43 interviews with 28 current and former members of staff as part of the review, including former chief executive Alison Rose, who stepped down after admitting to discussing Farage’s accounts with a BBC journalist in July. Lawyers also had access to 3.7m documents. A second report, reviewing the rationale behind bank account closures across Coutts over the past two years, will be handed to the board later this year. The NatWest chair, Howard Davies, said: “This report sets out a number of serious failings in the treatment of Mr Farage. We apologise once again to Mr Farage for how he has been treated. His experience fell short of the standards that any customer should expect. Our job now is to make sure that does not happen again.” Davies said the bank would implement all the law firm’s recommendations. These include ensuring that the lawfully protected beliefs or opinions of customers do not play any role in decisions to bank clients; how decisions to drop clients are made and communicated to customers; and better training for staff in how to make those decisions, handle complaints and manage client confidentiality. NatWest has yet to confirm whether it will claw back or withhold up to £10m in potential pay from Rose. The chief executive has been receiving a £2.4m package since her resignation, but is also eligible for a maximum £2.9m annual bonus, and still holds in unvested shares that are worth around £5m based on NatWest’s current share price. The report said Rose had made an “an honest mistake” by discussing Farage’s accounts with a BBC journalist and that she mistakenly believed his relationship with the bank was already publicly known. Travers Smith also confirmed that Rose played no part in the decision to close Farage’s accounts and that she had not seen the internal documents that were eventually released to Farage following a subject access request in July. Farage condemned the report on Friday, saying it “whitewashed” the decision to close his accounts. “Travers Smith has taken a very mealy-mouthed approach to this complex issue. The law firm argues that my political views ‘not aligning with those of the bank’ was not in itself a political decision. This is laughable.” Earlier this week, the Information Commissioner’s Office ruled that Rose had breached data protection laws by discussing Farage’s accounts with the BBC. Commenting on the report, Rose said: “This confirms everything I told the board in July was correct … Travers Smith is clear that ‘there was no leak of specific detailed financial information’. Travers Smith also confirmed I knew nothing about the comments made by Coutts staff about Mr Farage, which were deeply unpleasant and unfair.”