More jobs to go as NatWest plans 300 branch closures

NatWest said yesterday there would be further job cuts in the UK bank on top of 3,800 lost over the last 12 months, as another 300 branches close by the end of the decade.

Indications that the bank's intensive slimming programme is still on course came as NatWest completed a pounds 451m share buy-back at 626p a share to distribute surplus capital to shareholders.

Derek Wanless, chief executive, said: "We see a significant further reduction in jobs on top of the significant reductions we have seen in the last few years - that is an industry-wide trend." He refused to predict the number of jobs still to go, saying unions and staff would be told first.

He also said NatWest had achieved half the 10 percentage-point reduction it planned in the ratio of costs to its income in the UK, which has fallen to 67.8 per cent over the last year.

NatWest warned the ratio might rise in the second half-year because of spending on new technology, and that progress towards the 63 per cent target, which has been set for the end of the decade, would be "lumpy".

NatWest will have cut almost 1,000 branches between 1992 and 2000. In the last five years it has eliminated 30,000 jobs in the UK, offset by only 10,000 new ones. In the latest six months it has cut 1,500 jobs after a reduction of 2,300 in the second half of last year.

Mr Wanless made clear NatWest would still like to use some of its money to buy a life insurance company, but no deal is imminent. He said: "We currently see no opportunities that meet all our acquisition criteria."

After the bank gave the spare cash in its kitty back to shareholders, the price slipped 12p to 616p, which dealers said was because institutions that took the money would not be able to trade for some while. If they did, the Inland Revenue might question their tax rebates on the buy-back cash.

NatWest's pre-tax profits were down from pounds 872m a year ago to pounds 302m in the latest half-year, a consequence of write-downs and integration costs that confused the results. But underlying pre-tax profit rose 23 per cent.

After including paper losses on the disposal of Bancorp in the United States - because of recent accounting rules on the treatment of goodwill - NatWest went into the red, losing pounds 282m after tax and dividends in the half year, compared with a profit of pounds 439m a year earlier. The interim dividend is up 14 per cent.

There was a sharp rise in bad debt at the Lombard finance house, from pounds 51m to pounds 74m because of a rush of bad loans mainly to young and low income customers for electronics goods such as mobile phones.

But down-payments and age limits are being raised and the subsidiary is being restructured by Stewart Legg, a new chief executive who took over this month. Mr Wanless saw it as an example of banks spotting problems earlier than in the past. He said "We are at the stage in the economic cycle when traditionally banks have made mistakes."

NatWest Markets, the investment bank, made pounds 261m before tax compared with pounds 209m a year ago. Dealing income was pounds 305m compared with pounds 261m a year earlier.

Investment Column, page 18

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones