Derek Wanless is trying not to look piqued. But, having been jilted twice in just a few months, NatWest Group's chief executive is not finding it easy. First he tried to push through to the altar with Barings' corporate finance department; then last week he sought to elbow the chosen groom, Swiss Bank Corporation, out of the aisle, and snatch Warburg. In both cases the damsels were in distress, but evidently not sufficiently to accept NatWest's advances.
The market is left wondering what it will try next. For few big banks, in a sector permanently awash with takeover and merger speculation, have been so open about their ambition to become an international investment banking force. In March Mr Wanless said building up NatWest Markets, probably by acquisition, was a priority. This was based on the feeling that the core retail banking side is on a low earnings trajectory, with investment banking viewed as a growth area, despite the miseries of the sector last year.
Mr Wanless gave the impression that his group was looking primarily at New York, where NatWest Markets has a weak presence, for an investment banking acquisition. Suddenly, however, the action switched to London when Barings' collapse offered NatWest the chance to pick up a blue-chip merchant banking operation. In the event, ING, the Dutch bank and insurance group, bought all of Barings. But NatWest's appetite had clearly been whetted, for three months later it made a late try for Warburg too.
Both bids seemed highly opportunistic, but were not without logic. For NatWest still has a patchy UK investment banking business, looking for a step up to the first division. While it has some recognised strengths in securities - NatWest Markets has just scooped three of the four main prizes in the first Reuters ranking of investment analysts - the corporate finance side has never recovered from the ravages of the Blue Arrow debacle. NatWest has found that a strong corporate list on the commercial banking side does not translate into the advisory franchises that bring the lucrative, recurring business.
That is the reason why NatWest was tempted by Barings, and was the key to what it wanted from Warburg. The extent of duplication on the securities side would have caused a real problem, however, necessitating large redundancies - a factor which militated against NatWest's overture.
But snobbery was another powerful reason why NatWest's overtures came to nothing. The public school chaps at Barings and Warburg looked down their long noses at the Manchester grammar school retail banking boys in their polyester suits and said "No". "If NatWest had got near us, half of corporate banking would have walked out," one Warburg director said. All the tribulations of Barings and Warburg had apparently failed to dent the ethos of merchant banking superiority, one of the more unique features of the City in international financial centres. Given that investment banking takeovers are about buying and retaining assets on two legs, this prejudice had to be taken seriously. Ironically, both Barings and Warburg probably found it less disagreeable to capitulate to foreigners than NatWest.
Despite his comparatively fat chequebook, Mr Wanless is not spoilt for City targets. Schroders would be a good fit, with scant securities duplication and a powerful corporate finance reputation. But Schroders is as prejudiced as the others about the attractiveness of mere retail bankers, and the 43 per cent held by the family makes it a difficult target. Kleinwort Benson is still the most obvious. Both banks are seeking to pursue a more limited strategy that does not require large amounts of capital, such as NatWest is offering.
NatWest may find it easier to focus on its original plan to expand in New York. But there may be little time. If the Glass-Steagall Act, keeping apart lending and securities businesses, is largely repealed, as seems likely, then the floodgates will be opened for the US retail banking giants to pour onto Wall Street in a buying spree the likes of which has not been seen for some time. NatWest could well be washed aside.
Market Report, page 27