The cuts are a result of the group's plans to build a "new retail bank". They confirm the fears of Bifu, the banking union, which warned of the scale of job losses earlier this year.
Bifu urged NatWest to go back to drawing board over the planned cuts. "By closing branches wholesale NatWest are pulling out of communities. Now they want to take employment away from communities too. We cannot endorse the creation of unemployment ghettos," said Alan Ainsworth, Bifu's chief negotiator at NatWest.
NatWest aims to have just 1,750 branches by 2001, which means the closure of 300 branches. It had 2,805 branches at the start of the decade.
The bank is also moving processing of cheques, now done in branches and at 150 specialist units around the country, to 60 locations. These will operate as telephone call centres and handle account management, cash movement and lending.
Mr Ainsworth said East Anglia would have one centre of between 30 to 60 staff and South Wales one centre with around 100 staff. There are no plans for centres in England north of Bolton, while in the West and South- west of England, the centres will be in Bristol and Plymouth.
The London area will be hit, with most of the operations work moving out to the M25.
Tim Jones, managing director, retail banking services at NatWest, said most of the cuts would be from "non-customer facing jobs". "There will be opportunities for staff to move to new roles," he said.
The rate of change of job losses was slowing down compared with the past five years, during which time the bank had shed 16,000 from its workforce with "virtually" no compulsory redundancies, Mr Jones said.
Avoidance of compulsory job losses is the aim again this time, although he said if they did become compulsory,staff would be warned six months in advance.
"We welcomed the pledge in October of no compulsory redundancies and will continue to contribute to the departure terms," Mr Ainsworth said.
The bank declined to specify how much the job losses and investment would cost, but it is believed it will cost hundreds of millions of pounds.
The project will involve new technology being installed at the 60 locations. This technology will include a facility which will take a picture of the front and the back of a cheque rather than involve a person inputting information from the cheque into a computer system.
Some of the 60 centres will just deal with this "voucher processing", while others will handle account management,dealing with post, sanctioning loans and debt recovery.
Phone calls to branches will be routed to centres in Bradford, Enfield, Hitchin, Leicester, Liverpool, north-west Kent, Menai (North Wales), Plymouth, Solent, Theale and the West Midlands. These will provide a "one stop" service for telephone enquiries.
"The financial services marketplace is becoming increasingly competitive and the way our customers want to do business is changing," Mr Jones said.
Midland Bank, which has the First Direct specialist telephone banking service, also routes its customer calls to centralised service centres.
NatWest's announcement coincided with the release of the annual Banking Ombudsman report, which showed a 22 per cent rise in telephone enquiries and complaints.
Comment, page 21
Jobs losses at the banks
Already gone Still to go
Barclays 21,000 (since end 31) 1,000 this year.
(Branch automation 9,000?)
Lloyds-TSB 24,000 (since 90) 1,400 in this year.
(Lloyds-TSB merger 10,000?)
Midland 9,000 (since 90) 3,000
(10,000 cut in 80s when others growing)
Natwest 23,00 since 1990 10,000
RBS 5,000 Ongoing
Total job losses in finance - 120,000 in six years