NatWest board grilled on losses

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Lord Alexander, chairman of NatWest Bank, told shareholders at a stormy annual meeting yesterday that a full report into the recent pounds 77m loss on interest rate options would be ready within a month, but admitted he could not say whether the whole report would be made public.

The board of NatWest rejected calls for the resignation of Martin Owen, chief executive of NatWest Markets where the losses took place, and the bank's auditors, KPMG. The criticisms by shareholders hit sentiment in the bank's shares, which closed down 3.5p at 693.5p.

Shareholders grilled the board over the losses and where the blame should lie. Lord Alexander said that although it was unlikely the whole report would be made public, "what I can promise you is that shareholders will be kept informed of any significant developments". The report is being prepared by Coopers & Lybrand, chartered accountants, and Linklaters & Paines, the law firm.

Lord Alexander was also forced to defend the bank's auditors, KPMG, against suggestions that they should share blame for the options debacle. Lord Alexander said KPMG deserved "fair treatment" until the report was produced.

Despite shareholders' requests, Lord Alexander said he was not willing to change the term of office of the auditors.The resolution at the meeting to reappoint the auditors was passed on a poll vote after failing on a show of hands. Ashareholder said: "They [the auditors] have been paid as experts and they are not acting as experts."

Lord Alexander faced further opposition when it came to re-electing six directors to the board, normally a routine matter. Rory Murphy, general secretary of the NatWest Staff Association, presented himself as a seventh candidate and said shareholders should block the re-election of Mr Owen.

Mr Murphy derided the pounds 200,000 cut Mr Owen took in his bonus due to the options trading losses. Lord Alexander rejected Mr Murphy's appointment and instead backed Mr Owen, who won the vote.