NatWest Markets will split into two

NatWest Markets tackled mounting speculation over its future yesterday by announcing it was to split in two, separating its investment banking activities from its wholesale corporate banking operations.

The move, announced only days before next week's results announcement from its parent, NatWest Group, was seen as a prelude to a possible disposal of the troubled investment bank.

The reorganisation, which also included the appointment of a little-known insider as chief executive, was greeted with scant enthusiasm in the City, where analysts thought it would do little to reverse the recent underperformance of NatWest's shares, which closed a further 7p lower yesterday at 859.5p.

One dismissed it as "just a matter of rearranging the deck chairs on the Titanic".

Another saw the move as a "damp squib", saying it was not clear what the restructuring would achieve in the long term, other than making the investment bank more saleable.

It had been hoped that NatWest would announce the disposal of NatWest Markets, a move that could have paved a way for a full-scale bid for the rest of the group.

The appointment yesterday of Konrad "Chip" Kruger as chief executive of NatWest Markets was seen as a tacit admission by the bank that it had been unable to attract a heavyweight outsider to restore the bank's fortunes after a series of recent embarrassments, including a heavy derivatives loss and the dismissal of its chief executive.

Mr Kruger joined NatWest in October 1996 at the time of the acquisition of Greenwich Capital Markets, one of a series of deals that have seen the bank spend more than pounds 1bn on building up its presence in investment banking.

Speaking after his appointment, he said: "Like many of our investment banking peers, we have experienced a period of intense scrutiny. Despite these distractions, we remain focused on delivering the results that clients, shareholders and employees expect from a first class business."

NatWest's policy of combining its predictable high street retail banking operations with a more volatile investment bank has come under increasingly critical scrutiny in recent months ever since a pounds 90m loss was discovered in its derivatives operation.

The loss, and a subsequent cover up of the problem, has resulted in half a dozen resignations from the investment bank, including that of Martin Owen, its former chief executive.

That has thrown the spotlight on the future of NatWest Group itself, especially after it emerged that preliminary takeover talks had taken place between its senior management and both Abbey National and the Prudential.

Yesterday's announcement trailed the formation of a new unit to be called Global Financial Markets, which will be used to transfer NatWest Markets' treasury, foreign exchange, interest rate trading, money markets and currency options businesses back into the group.

The new division will be headed by Stephan Harris, who is currently group treasurer.

Analysts said the remaining equity, bond and advisory arms would make a more acceptable package for an overseas buyer, if that became NatWest's preferred option, although it is thought NatWest remains committed for the time being to attempting to build up a meaningful presence in global investment banking.

PROMOTED VIDEO
Arts and Entertainment
Standing the test of time: Michael J Fox and Christopher Lloyd in 'Back to the Future'
filmReview: A week late, Secret Cinema arrives as interactive screening goes Back to the Future
Arts and Entertainment
The first film introduced Daniel Radcliffe to our screens, pictured here as he prepares to board the train to Hogwarts for the first time.
booksHow reading Harry Potter helps children grow up to be gay-friendly
News
Chancellor George Osborne, along with the Prime Minister, have been 'complacently claiming the economy is now fixed', according to shadow Chancellor Ed Balls
i100... which is awkward, because he is their boss, after all
Travel
travel
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
filmBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
i100
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Arts and Entertainment
Preparations begin for Edinburgh Festival 2014
Edinburgh festivalAll the best shows to see at Edinburgh this year
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Arts and Entertainment
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Financial Analyst - Forecasting - Yorkshire

£300 - £350 per day: Orgtel: Financial Analyst, Forecasting, Halifax, Banking,...

Business Architect - Bristol - £500 per day

£500 per day: Orgtel: Business Architect - Banking - Bristol - £500 per day A...

Regulatory Reporting-MI-Bank-Cardiff-£300/day

£200 - £500 per day + competitive: Orgtel: I am currently working on a large p...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices