The surprise appointment of Sir David, regarded as the saviour of the Lloyd's insurance market, was well received by most City analysts. NatWest shares finished up 33p at 990p.
Lord Alexander of Weedon, the current NatWest chairman, is to leave the bank in April. Although analysts had been expecting Lord Alexander to step down at next year's annual meeting of shareholders, the identity of his successor came as a surprise; Lord Blyth, the chairman of Boots and a non-executive director of the bank, had been widely tipped.
Sir David, who at 65 is three years older than Lord Alexander, said he was "delighted" at his appointment. Lord Alexander said that Sir David had the "necessary mix" of qualities for the chairmanship. "He has a lot of experience, a clear mind and respect within the City," the outgoing chairman said.
The appointment was ratified by the board yesterday morning, NatWest said. Sir David had been the "first and unanimous" choice of the board, according to a source close to the bank.
NatWest has also invited Sir Dick Evans, the chairman of British Aerospace, to join the board as a non-executive director effective from 1 October.
The management changes were generally well received by most analysts, many of whom had been unhappy with Lord Alexander's tenure. One said: "There are certain people who will be glad to see Lord Alexander go. He was not really on the same wavelength as we were."
Sir David's appointment was called "safe but unimaginative" by one leading analyst, while another said he thought Sir David "looked good on paper". Others noted that the former Lloyd's of London chairman, who has been a non-executive director of the bank since April, lacked "hands-on retail experience".
Prior commitments at Boots meant that Lord Blyth, who was widely expected to take up the reins, would have been unable to assume the chairmanship until the end of next year.
Had Lord Blyth been appointed, NatWest would have had to choose between extending Lord Alexander's tenure or appointing an interim chairman.
Lord Hurd of Westwell and Sir George Quigley are to retire from the NatWest board in April, although both will continue to be employed by the bank.Reuse content