New jobs threat from hostile NatWest bid

Royal Bank of Scotland today announced a hostile £26.4 billion takeover offer for NatWest which would see 3,000 extra job cuts across the two groups.

Royal Bank of Scotland today announced a hostile £26.4 billion takeover offer for NatWest which would see 3,000 extra job cuts across the two groups.

NatWest has already pledged to cut about 15,000 jobs from its workforce, but RBS today said it had identified scope to cut 18,000 positions if its takeover went ahead. Most cuts would be made in the UK.

The offer comes after weeks of wrangling for troubled NatWest and will be greeted with concern by workers at the two operations.

RBS, whose offer eclipses a renewed bid on Friday by Bank of Scotland, said it planned to make savings totalling £1.18 billion from the combination.

NatWest's management rejected a friendly approach from RBS at the weekend.

Fred Goodwin, RBS chief operating officer, said the cuts would be made in several areas, including back office administration functions and at the two head offices.

However, he pledged there would be no branch closures as a result of the deal.

"Branch closures are a very expensive way of achieving cost efficiencies. Closing a bank branch can badly affect customers just at the time when we want to retain them."

The takeover battle for NatWest was sparked by Bank of Scotland's original offer, worth about £22.35 billion.

The company has been seen as underperforming the rest of the banking sector.

Mr Goodwin, who would become chief executive of the combined group if the RBS offer is accepted by shareholders, said: "This is a good price and a fair price for NatWest."

RBS pledged minimal disruption to customers and said the two banks could use the same information technology platform - usually a major stumbling block for merging companies.

Mr Goodwin was keen to stress that the RBS takeover was less risky than the Bank of Scotland's offer.

RBS expected to dispose of NatWest's Gartmore and US Greenwich NatWest investment arms, but it would probably retain Ulster Bank, UK Greenwich NatWest and Coutts, the royal banker.

The senior management team of the combined group would be made up of RBS executives.

RBS chairman Viscount Younger would remain as chairman, Sir George Mathewson, RBS chief executive, would become executive deputy chairman and Mr Goodwin would become chief executive.

Describing its offer as "unsolicited", RBS said it was still open to negotiations with the NatWest board.

Sir George said there was no animosity between his executive and its NatWest counterparts despite the breakdown of talks on Saturday.

"Making a decision like that is a very difficult thing for a board in a company with the history, and traditions NatWest has."

The NatWest and RBS retail operations would continue to be run as separate entities.

NatWest issued a statement saying it was considering the offer.

"In the meantime, the board of NatWest recommends that shareholders take no action," it said.

Fred Goodwin, RBS chief operating officer, said the cuts would be made in several areas, including back office administration functions and at the two head offices.

However, he pledged there would be no branch closures as a result of the deal.

"Branch closures are a very expensive way of achieving cost efficiencies. Closing a bank branch can badly affect customers just at the time when we want to retain them."

The takeover battle for NatWest was sparked by Bank of Scotland's original offer, worth about £22.35 billion.

The company has been seen as underperforming the rest of the banking sector.

Mr Goodwin, who would become chief executive of the combined group if the RBS offer is accepted by shareholders, said: "This is a good price and a fair price for NatWest."

RBS pledged minimal disruption to customers and said the two banks could use the same information technology platform - usually a major stumbling block for merging companies.

Mr Goodwin was keen to stress that the RBS takeover was less risky than the Bank of Scotland's offer.

RBS expected to dispose of NatWest's Gartmore and US Greenwich NatWest investment arms, but it would probably retain Ulster Bank, UK Greenwich NatWest and Coutts, the royal banker.

The senior management team of the combined group would be made up of RBS executives.

RBS chairman Viscount Younger would remain as chairman, Sir George Mathewson, RBS chief executive, would become executive deputy chairman and Mr Goodwin would become chief executive.

Describing its offer as "unsolicited", RBS said it was still open to negotiations with the NatWest board.

Sir George said there was no animosity between his executive and its NatWest counterparts despite the breakdown of talks on Saturday.

"Making a decision like that is a very difficult thing for a board in a company with the history, and traditions NatWest has."

The NatWest and RBS retail operations would continue to be run as separate entities.

NatWest issued a statement saying it was considering the offer.

"In the meantime, the board of NatWest recommends that shareholders take no action," it said.

The banking union UNIFI warned today that it was considering industrial action over the NatWest job losses.

The union condemned news of further cutbacks and said that unless a pledge of no compulsory redundancies was given, it would consider balloting members for action.

"With NatWest preparing to sack a third of its workforce, who will be left to serve customers?" asked joint general secretary Rory Murphy.

"Our members are very angry over the way NatWest has gambled with their jobs. We believe that they are prepared for a fight."

The union is seeking urgent talks with NatWest and the Royal Bank of Scotland to achieve assurances that any job losses will be achieved through natural wastage and volunteers.