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NatWest set to announce sale of equities division

NatWest, the banking group, will today announce the sale of the equities division of its NatWest Markets investment banking arm for less than the City is expecting.

The equity derivatives portion will go to Deutsche Morgan Grenfell (DMG), part of Germany's Deutsche Bank, while US bank Bankers Trust will buy the larger cash equities division.

Both transactions are expected to be announced simultaneously.

One banking source said DMG would pay between pounds 50m and pounds 100m - "but nearer the lower end of the scale" - for the derivatives business. Previously analysts had expected the business to go for pounds 100m. Bankers Trust is widely expected to pay between pounds 200m and pounds 300m for the cash equities arm.

The combination would amount to more than the asset value of the various components, something which NatWest's high street rival Barclays failed to achieve when it sold part of its BZW equities division recently to Credit Suisse First Boston.

"The trick is getting a price that suits everyone," one investment banker said, adding that media speculation about what NatWest was likely to achieve had already soured negotiations at a critical time. The announcement will end months of uncertainty for NatWest Markets staff and clients.