NatWest chief Wanless falls as first casualty of bid battle

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The Independent Online

THE BATTLE for NatWest, the high street bank, claimed its first human casualty yesterday as Derek Wanless resigned as group chief executive with immediate effect.

THE BATTLE for NatWest, the high street bank, claimed its first human casualty yesterday as Derek Wanless resigned as group chief executive with immediate effect.

Mr Wanless had been under considerable pressure from NatWest investors to step down, but there was surprise that he had been forced out so early in what many believe could well be a protracted battle for the bank.

His departure comes two weeks to the day after Bank of Scotland stunned the City by launching a £22bn hostile bid for NatWest. It follows Thursday's announcement that BoS plans to take out £1.05bn of costs if its bid for NatWest succeeds.

Sir David Rowland, the chairman, will take Mr Wanless's place as chief executive for the time being.

Ron Sandler, who with Sir David masterminded the rescue of Lloyds of London from its near-collapse in the early 1990s, joins the NatWest board as chief operating officer on a salary of £450,000 a year. Mr Wanless earned £832,000 last year and is entitled to at least a year's money.

Mr Sandler's first task will be to put together a credible go- it-alone strategy for the group involving more radical cost-cutting, selective disposals of non-core businesses and a programme of returning capital to shareholders.The decision by Mr Wanless to walk the plank will go some way towards propitiating those in the City who blame him for a catalogue of strategic failures and who have been baying for his blood for years.

There was surprise, however, that Sir David - who had first sounded out Mr Sandler about the job in September - was unable to persuade the NatWest board to endorse him immediately as group chief executive in Mr Wanless's stead.Bankers said that the fact that Mr Wanless has not been replaced was bound to be seen as leaving the door ajar for a friendly bid approach.

Commenting on yesterday's developments, Sir David rejected suggestions that Mr Wanless had been made the fall guy for failures for which othersshould shoulder responsibility. "Derek is a very honourable person. He has given a great deal to the bank and he has acted with good grace," he said.But he admitted that NatWest's track record and the reputation of its management had been an issue in the failure of NatWest's £10.5bn takeover bid for Legal & General, the life insurance group.

Sir David also admitted there were differences of opinion between himself and Mr Wanless, but insisted that these were in terms of speed of delivery rather than on the substance of the changes that both believed the bank had to make. Sir David insisted that NatWest could do more with its existing businesses but was not bent on independence at all costs. "We are not in the business of repelling boarders. If offers are made to us which offer real advantages we would accept them."

Although Mr Sandler said he was reluctant to pre-empt the formal defence document, due in the next few weeks, he made it clear that refocusing on core businesses, and an accelerated programme to cut costs would have to feature prominently in any defence strategy. "There is no doubt the bank has to change, and change quickly," he said.

Mr Wanless, while widely liked personally, is seen as having presided over too many banana skins and strategic U-turns over the past five years to be credibly part of a defence team that is seeking to prove it is better equipped to take the business forward than Peter Burt, the chief executive of BoS. NatWest shares rose 2p to 1,442p on the news. Bank of Scotland slipped 4.5p to 725p.

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