Staff morale hits rock bottom at NatWest

STAFF MORALE at NatWest has plunged since Derek Wanless, the bank's chief executive, was forced out last Friday in an attempt to shore up the bank's defences against a hostile £22bn bid from Bank of Scotland.

STAFF MORALE at NatWest has plunged since Derek Wanless, the bank's chief executive, was forced out last Friday in an attempt to shore up the bank's defences against a hostile £22bn bid from Bank of Scotland.

Senior management fear that Sir David Rowland, the chairman, and Ron Sandler, the chief operating officer, are planning to cut swathes of jobs in an attempt to prove their cost-cutting credentials and fight off the BoS bid.

Although Sir David has made a show of involving Richard Delbridge, the finance director, in the kitchen cabinet co-ordinating the defence against the BoS bid, the mood inside the NatWest headquarters is that no one associated with the old regime is safe.

Some are concerned that the size of the job cuts being contemplated could exceed anything that BoS could come up with. BoS says it will cut £1bn of costs but insists it can be done without substantial compulsory redundancies.

The split between Sir David and Mr Wanless stemmed in part from Mr Wanless's reluctance to endorse a defence that would entail tearing up NatWest's existing no compulsory redundancy agreement with NatWest unions.

Many staff broadly sympathise with the criticisms levelled by Peter Burt, the BoS chief executive, against NatWest's overcentralised bureaucracy. Others, however, are concerned that both BoS and Royal Bank of Scotland, which is also working on a NatWest bid, lack the experience to take on NatWest's corporate banking business.

Insiders say that efforts to court City popularity by imposing a unilateral wage freeze and cancelling Christmas parties are threatening to backfire, demotivating key staff at a time when they are needed most. Most are unsettled by the lack of information, which has encouraged rumour mongering.

Dai Davies of Unifi, the banking union, said: "There was pretty poor morale before this kicked off. The curtailing of expenditure they've had is a bit petty in the context of what is going on."

Frustrated staff have posted messages on NatWest's Intranet and the Internet. One message intercepted by The Independent reads: "What really pissed me off is that senior managers in the north/north-west have cancelled their annual area dinner! How tight-fisted can you get! Do these managers know how to kick their staff when down or what! Do they really think that by cancelling the dinner they will be able to save Natwest from being taken over."

BoS is expected to post its offer document today. Although it is unlikely to contain anything substantially new, it will set the clock ticking on the formal offer period under City takeover rules.