NatWest says 'adieu' to French retail banking after 80 years

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The Independent Online
NATIONAL Westminster Bank is pulling out of French retail banking after 80 years, during which it made a string of losses despite investing about pounds 135m.

Losses in France, where it operates 10 branches with 400 employees, mounted to pounds 36m in 1992 from pounds 21m in 1991 as the recession in Europe gained momentum.

NatWest is negotiating with several interested banks about purchasing the operations, including Republic National Bank of New York, which is interested in the Monaco branch. NatWest will incur a bad debt provision as a result, but it is not expected to have a significant negative effect on the bank's assets.

NatWest's move illustrates the difficulties facing all banks in penetrating foreign retail banking.

Derek Wanless, chief executive, said the decision to withdraw was not a response to the recession, but a step in the bank's strategy of focusing only on profitable businesses with a significant position in their given markets.

'This was not a decision based on the short term,' he said. 'We've been there for a long time and have not made a success of it.'

NatWest's European businesses made a pre-tax loss in 1992 of pounds 44m compared with a 1991 profit of pounds 38m. Its large Spanish retail operation is also struggling.

In an announcment to the Stock Exchange yesterday, the bank said it planned a progressive withdrawal from its retail business conducted through National Westminster Bank SA over the next 12 months.

NatWest will carry on its investment banking operation in Paris through NatWest Markets, where about 130 NatWest staff will remain. A stockbroker subsidiary, NatWest Sellier SA, which operates through NatWest markets, will also remain open. NatWest is also in discussion with Societe Generale in France on a co-operative venture in cross-border payments and banking services for medium-sized companies.

NatWest's shares closed 4p lower at 462p. Robert Law, analyst with Lehman Brothers, said the bank's strategy posed questions as to whether it would make further disposals in Europe or the US, where it suffered losses in the US recession.