Royal Bank of Scotland revives NatWest Markets as it removes its name from its investment bank

The bank is portraying the move as being part of a new brand strategy in the wake of rules that require retail banks to be ring fenced from investment banks. That's one way of looking at it

Royal Bank of Scotland. A tarnished brand?
Royal Bank of Scotland. A tarnished brand?

Royal Bank of Scotland’s decision to remove its name from its investment bank is being portrayed as a consequence of it having to ring fence the retail operations that serve you and me from those that play in the City of London’s casinos. As a result, the NatWest Markets brand, last seen at the turn of the century, is being revived.

Chief executive Ross McEwan says this is part of a new brand strategy. It will see the RBS name all but vanishing from England and Wales. “A key element of the bank we are becoming,” he proclaims. One that will “better reflect who we are as a bank and what we stand for”.

Well, that’s one way of looking at it. Another is that this is a tacit admission that the RBS brand is now so toxic and off-putting to customers, including the wealthy corporate customers that hire investment banks, that it’s time to bury it wherever possible.

Ring fencing has provided the bank with a useful opportunity to dump the Royal Bank of Scotland Investment Bank name in favour of the potentially more palatable NatWest Markets.

No one would describe the latter as an investment banking super brand. NatWest Markets was hardly a stunning success when it was knocking around the City and it’s not going to be mistaken for Goldman Sachs when it starts to appear on business cards and letter heads.

But, on the plus side, it lacks the negative resonances that come with the name “Royal Bank of Scotland”, or “Royal Bank of Scotland Investment Bank”. Which is kind of the point.

Corporate clients ought to feel more comfortable about having NatWest Markets on their roster of advisers than they do about having “Royal Bank of Scotland Investment Bank” there.

Employees may feel better about having it printed on their business cards and using it in answer to the question “where do you work?”.

I well remember speaking to someone about how much their son was enjoying his job in the City a few months ago. Who is he working for? I asked. Royal Bank of Scotland, she answered. Ouch, said I. She took the point before going on to tell me how much happier he was there than he was at his previous employer.

I’ve no doubt that’s true and that a lot of other people feel the same way. RBS has some talented people working for it and it has some decent people working for it. I’d imagine they find getting that reaction quite wearing. NatWest Markets shouldn’t induce it. The morale boost alone could justify the cost of rebranding.

Another point in favour of the name change is that when fines come in for the bank's past misdeeds – and a number are still looming – the press notices announcing them will criticise wrongdoing at RBS rather than at NatWest Markets. All of which should help Mr McEwan and his to team to fashion the resurrected NatWest Markets into a respectable second-tier investment bank.

As such it is an entirely justifiable thing to do. But RBS is kidding no one. This move has nothing whatsoever to do with ring fencing.

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