NatWest Group plc is a
British
British may refer to:
Peoples, culture, and language
* British people, nationals or natives of the United Kingdom, British Overseas Territories, and Crown Dependencies.
** Britishness, the British identity and common culture
* British English, ...
banking and insurance
holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
, based in
Edinburgh
Edinburgh ( ; gd, Dùn Èideann ) is the capital city of Scotland and one of its 32 Council areas of Scotland, council areas. Historically part of the county of Midlothian (interchangeably Edinburghshire before 1921), it is located in Lothian ...
, Scotland. The group operates a wide variety of banking brands offering personal and business banking, private banking, investment banking, insurance and
corporate finance
Corporate finance is the area of finance that deals with the sources of funding, the capital structure of corporations, the actions that managers take to increase the Value investing, value of the firm to the shareholders, and the tools and anal ...
. In the United Kingdom, its main subsidiary companies are
National Westminster Bank
National Westminster Bank, commonly known as NatWest, is a major retail and commercial bank in the United Kingdom based in London, England. It was established in 1968 by the merger of National Provincial Bank and Westminster Bank. In 2000, it ...
,
Royal Bank of Scotland,
NatWest Markets
NatWest Markets is the investment banking arm of NatWest Group.
It was created from the then RBS Group's corporate and institutional banking division in 2016, as part of a structural reform intended to comply with the requirements of the Finan ...
and
Coutts
Coutts & Co. is a London-headquartered private bank and wealth manager. Founded in 1692, it is the eighth oldest bank in the world. Today, Coutts forms part of NatWest Group's wealth management division. In the Channel Islands and the Isle of ...
. The group issues
banknotes
A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.
Banknotes were originally issued ...
in Scotland and Northern Ireland; , the Royal Bank of Scotland was the only bank in the UK to still print
£1 notes.
Before the 2008 collapse and the general
financial crisis
A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man ...
, the Group was very briefly the largest bank in the world, and for a period was the second-largest bank in the UK and Europe and the fifth-largest in the world by
market capitalisation
Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders.
Market capitalization is equal to the market price per common share multiplied by t ...
. Subsequently, with a slumping share price and major loss of confidence, the bank fell sharply in the rankings, although in 2009 it was briefly the world's largest company by both assets (£1.9 trillion) and liabilities (£1.8 trillion). It had to be bailed out by the UK government through the
2008 United Kingdom bank rescue package.
The government retained a majority share until 28 March 2022, held and managed through
UK Government Investments
UK Government Investments (UKGI) is a company owned by the Government of the United Kingdom which combines the former functions of the Shareholder Executive and UK Financial Investments based in London, England.
UKGI manages a portfolio of 17 ...
. Following a buyback by the NatWest Group, the government now holds a 48.1% share in the company.
In addition to its primary share listing on the
London Stock Exchange
London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St Pau ...
, the company is also listed on the
New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed c ...
.
History
The Royal Bank of Scotland Group
By the late 1960s, economic conditions were becoming more difficult for the banking sector. In response, the
National Commercial Bank of Scotland
The National Commercial Bank of Scotland Ltd. was a Scotland, Scottish commercial bank. It was established in 1959 through a merger of the National Bank of Scotland (established in 1825) with the Commercial Bank of Scotland (established in 1810) ...
merged with the
Royal Bank of Scotland. The merger resulted in a new
holding company
A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies ...
, the National and Commercial Banking Group being founded in 1968 with the merger formalised in 1969. The holding company was renamed The Royal Bank of Scotland Group on 4 July 1979.
The late 1990s saw a new wave of consolidation in the financial services sector. In 1999, the
Bank of Scotland
The Bank of Scotland plc (Scottish Gaelic: ''Banca na h-Alba'') is a commercial and clearing bank based in Scotland and is part of the Lloyds Banking Group, following the Bank of Scotland's implosion in 2008. The bank was established by th ...
launched a hostile takeover bid for English rival National Westminster Bank. The Bank of Scotland intended to fund the deal by selling off many of NatWest's subsidiary companies, including Ulster Bank and Coutts. However, the Royal Bank of Scotland subsequently tabled a counter-offer, sparking off the largest hostile takeover battle in UK corporate history. A key differentiation from the Bank of Scotland's bid was the Royal Bank of Scotland's plan to retain all of NatWest's subsidiaries. Although NatWest, one of the "
Big Four" English clearing banks, was significantly larger than either Scottish bank, it had a recent history of poor financial performance and plans to merge with insurance company
Legal & General
Legal & General Group plc, commonly known as Legal & General, is a British multinational financial services and asset management company headquartered in London, England. Its products and services include investment management, lifetime mortg ...
were not well received, prompting a 26% fall in share price.
On 11 February 2000, The Royal Bank of Scotland was declared the winner in the takeover battle, becoming the second largest banking group in the UK after
HSBC Holdings
HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tril ...
. NatWest as a distinct banking brand was retained, although many back-office functions of the bank were merged with the Royal Bank's, leading to over 18,000 job losses throughout the UK.
Further expansion
![Royal Bank of Scotland](https://upload.wikimedia.org/wikipedia/commons/4/49/Royal_Bank_of_Scotland._-_geograph.org.uk_-_26163.jpg)
In August 2005, the bank expanded into China, acquiring a 10% stake in the
Bank of China
The Bank of China (BOC; ) is a Chinese majority state-owned commercial bank headquartered in Beijing and the fourth largest bank in the world.
The Bank of China was founded in 1912 by the Republican government as China's central bank, repl ...
for £1.7 billion, which it had sold by 2009.
In 2005, the bank built a new international headquarters at
Gogarburn
Gogar is a predominantly rural area of Edinburgh, Scotland, located to the west of the city. It is not far from Gogarloch, Edinburgh Park and Maybury. The Fife Circle Line is to the north.
Etymology
The name of Gogar first appears in a clea ...
on the outskirts of Edinburgh, and was opened by
Queen Elizabeth II
Elizabeth II (Elizabeth Alexandra Mary; 21 April 1926 – 8 September 2022) was Queen of the United Kingdom and other Commonwealth realms from 6 February 1952 until Death and state funeral of Elizabeth II, her death in 2022. She was queen ...
and
Prince Philip, Duke of Edinburgh
Prince Philip, Duke of Edinburgh (born Prince Philip of Greece and Denmark, later Philip Mountbatten; 10 June 1921 – 9 April 2021) was the husband of Queen Elizabeth II. As such, he served as the consort of the British monarch from El ...
.
The group was part of a consortium with Belgian bank
Fortis and Spanish bank
Banco Santander
Banco Santander, S.A., doing business as Santander Group (, , Spanish: ), is a Spanish multinational financial services company based in Madrid and Santander in Spain. Additionally, Santander maintains a presence in all global financial centr ...
that acquired Dutch bank
ABN AMRO
ABN or abn may refer to:
Companies
* ABN AMRO Group, a Dutch bank group
* ABN AMRO, sometimes referred to as "ABN" in shorthand, is a Dutch state-owned bank
* Algemene Bank Nederland, a now-defunct Dutch bank
Radio, news and television organizat ...
in October 2007. Rivals speculated that RBS had overpaid for the Dutch bank
although the bank pointed out that of the £49bn paid for ABN AMRO, RBS's share was only £10bn (equivalent to £167 per citizen of the UK).
Much later, the bank announced it was to scale back its international presence. "Let me spell it out very clearly: the days when RBS sought to be the biggest bank in the world, those days are well and truly over", Chief Executive
Ross McEwan
Ross Maxwell McEwan (born 16 July 1957) is a New Zealand banker, and the chief executive officer (CEO) and managing director of National Australia Bank.
He was previously the chief executive officer (CEO) of The Royal Bank of Scotland Group ...
, who had been in charge of the bank for four months, said in unveiling plans to reduce costs by £5bn over four years. "Our ambition is to be a bank for UK customers", he added.
2008–2009 financial crisis
On 22 April 2008 RBS announced a
rights issue
A rights issue or rights offer is a dividend of subscription rights to buy additional securities in a company made to the company's existing security holders. When the rights are for equity securities, such as shares, in a public company, it can b ...
which aimed to raise £12bn in new capital to offset a
writedown
A write-off is a reduction of the recognized value of something. In accounting, this is a recognition of the reduced or zero value of an asset. In income tax statements, this is a reduction of taxable income, as a recognition of certain expenses ...
of £5.9bn resulting from credit market positions and to shore up its reserves following the purchase of ABN AMRO. This was, at the time, the largest rights issue in British corporate history.
The bank also announced that it would review the possibility of divesting some of its subsidiaries to raise further funds, notably its insurance divisions
Direct Line
Direct Line is an insurance company based in Bromley, England. Founded in 1985, as the country's first direct car insurance company, it has since expanded to offer a range of general insurance products. Its policies are underwritten by the regul ...
and
Churchill
Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 during the Second World War, and again from 1 ...
. Additionally, the bank's stake in Tesco Bank was bought by Tesco for £950 million in 2008.
On 13 October 2008, in a move aimed at recapitalising the bank, it was announced that the British Government would take a stake of up to 58% in the Group. The aim was to "make available new
tier 1 capital
Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view.By definition of Bank for International Settlements. It is composed of ''core capital'', which consists primarily of common stock and disclosed res ...
to UK banks and building societies to strengthen their resources permitting them to restructure their finances, while maintaining their support for the real economy, through the recapitalisation scheme which has been made available to eligible institutions".
HM Treasury
His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ec ...
injected £37 billion ($64 billion, €47 billion, equivalent to £617 per citizen of the UK) of new capital into Royal Bank of Scotland Group plc,
Lloyds TSB
Lloyds Bank plc is a British retail and commercial bank with branches across England and Wales. It has traditionally been considered one of the " Big Four" clearing banks. Lloyds Bank is the largest retail bank in Britain, and has an exte ...
and
HBOS
HBOS plc was a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group, having been taken over in January 2009. It was the holding company for Bank of Scotland plc, which operated the Ba ...
plc, to avert financial sector collapse. The government stressed, however, that it was not "standard public ownership" and that the banks would return to private investors "at the right time".
Alistair Darling
Alistair Maclean Darling, Baron Darling of Roulanish, (born 28 November 1953) is a British politician who served as Chancellor of the Exchequer under Prime Minister Gordon Brown from 2007 to 2010. A member of the Labour Party, he was a Member ...
, the
Chancellor of the Exchequer
The chancellor of the Exchequer, often abbreviated to chancellor, is a senior minister of the Crown within the Government of the United Kingdom, and head of His Majesty's Treasury. As one of the four Great Offices of State, the Chancellor is ...
, stated that the UK government would benefit from its rescue plan, for it would have some control over RBS in exchange for £5 billion in preference shares and underwriting the issuance of a further £15 billion in ordinary shares. If shareholder take-up of the share issue was 0%, then total government ownership in RBS would be 58%; and, if shareholder take-up was 100%, then total government ownership in RBS would be 0%. Less than 56 million new shares were taken up by investors, or 0.24pc of the total offered by RBS in October 2008.
As a consequence of this rescue, the Chief Executive of the group,
Fred Goodwin
Frederick Anderson Goodwin FRSE FCIBS (born 17 August 1958) is a Scottish chartered accountant and former banker who was Chief Executive Officer (CEO) of the Royal Bank of Scotland Group (RBS) between 2001 and 2009.
From 2000 to 2008, he pre ...
, offered his resignation and it was duly accepted.
Sir Tom McKillop confirmed that he would stand down from his role as chairman when his contract expired in March 2009. Goodwin was replaced by Stephen Hester, previously the Chief Executive of
British Land
The British Land Company plc is one of the largest property development and investment companies in the United Kingdom. The firm became a real estate investment trust when REITs were introduced in the UK in January 2007. It is headquartered in ...
, who commenced work at the Royal Bank of Scotland in November 2008.
On 19 January 2009, the British Government announced a further injection of funds into the
UK banking system in an attempt to restart personal and business lending. This would involve the creation of a state-backed insurance scheme which would allow banks to insure against existing loans going into default, in an attempt to restore the banks' confidence.
At the same time the government announced its intention to convert the
preference shares
Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt inst ...
in RBS that it had acquired in October 2008 to ordinary shares. This would remove the 12% coupon payment (£600m p.a.) on the shares but would increase the state's holding in the bank from 58% to 70%.
[RBS shares plunge on loss]
BBC News, 19 January 2009
On the same day RBS released a
trading statement
The trading statement is an expanded version of sales portion of the Income statement. The trading statement's main objective is to determine sales, cost of sales and gross profit. The trading statement it's part of effective book keeping within t ...
in which it expected to post full-year trading losses (before
writedown
A write-off is a reduction of the recognized value of something. In accounting, this is a recognition of the reduced or zero value of an asset. In income tax statements, this is a reduction of taxable income, as a recognition of certain expenses ...
s) of between £7bn and £8bn. The group also announced writedowns on
goodwills (primarily related to the
takeover
In business, a takeover is the purchase of one company (the ''target'') by another (the ''acquirer'' or ''bidder''). In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to t ...
of
Dutch
Dutch commonly refers to:
* Something of, from, or related to the Netherlands
* Dutch people ()
* Dutch language ()
Dutch may also refer to:
Places
* Dutch, West Virginia, a community in the United States
* Pennsylvania Dutch Country
People E ...
bank
ABN-AMRO) of around £20bn. The combined total of £28bn would be the biggest ever annual loss in UK corporate history (the actual figure was £24.1bn). As a result, during the
Blue Monday Crash, the group's share price fell over 66% in one day to 10.9p per share, from a 52-week high of 354p per share, itself a drop of 97%.
[
]
Mid-2008 onwards
RBS' contractual commitment to retain the 4.26% Bank of China
The Bank of China (BOC; ) is a Chinese majority state-owned commercial bank headquartered in Beijing and the fourth largest bank in the world.
The Bank of China was founded in 1912 by the Republican government as China's central bank, repl ...
(BoC) stake ended on 31 December 2008, and the shares were sold on 14 January 2009. Exchange rate fluctuations meant that RBS made no profit on the deal. The Scottish press suggested two reasons for the move: the need for a bank mainly owned by HM Treasury
His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ec ...
to focus scarce capital
Capital may refer to:
Common uses
* Capital city, a municipality of primary status
** List of national capital cities
* Capital letter, an upper-case letter Economics and social sciences
* Capital (economics), the durable produced goods used f ...
on British markets, and the growth possibility of RBS's own China operations.
Also in March 2009, RBS revealed that its traders had been involved in the purchase and sale of sub-prime securities under the supervision of Fred Goodwin
Frederick Anderson Goodwin FRSE FCIBS (born 17 August 1958) is a Scottish chartered accountant and former banker who was Chief Executive Officer (CEO) of the Royal Bank of Scotland Group (RBS) between 2001 and 2009.
From 2000 to 2008, he pre ...
.
In September 2009, RBS and NatWest announced dramatic cuts in their overdraft fees including the unpaid item fee (from £38 to £5), the card misuse fee (from £35 to £15) and the monthly maintenance charge for going overdrawn without consent (from £28 to £20).[Jones, Rupert]
"Royal Bank of Scotland and NatWest cut overdraft charges"
''The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
''. 7 September 2009 The cuts came at a time when the row over the legality of unauthorised borrowing reached the House of Lords
The House of Lords, also known as the House of Peers, is the Bicameralism, upper house of the Parliament of the United Kingdom. Membership is by Life peer, appointment, Hereditary peer, heredity or Lords Spiritual, official function. Like the ...
. The fees were estimated to earn current account providers about £2.6bn a year. The Consumers' Association chief executive, Peter Vicary-Smith, said: "This is a step in the right direction and a victory for consumer pressure."
In November 2009, RBS announced plans to cut 3,700 jobs in addition to 16,000 already planned, while the government increased its stake in the company from 70% to 84%.
In December 2009, the RBS board revolted against the main shareholder, the British government. They threatened to resign unless they were permitted to pay bonuses of £1.5bn to staff in its investment arm.
More than 100 senior bank executives at the Royal Bank of Scotland were paid more than £1 million in late 2010 and total bonus payouts reached nearly £1 billion – even though the bailed-out bank reported losses of £1.1 billion for 2010. The 2010 figure was an improvement on the loss of £3.6 billion in 2009 and the record-breaking £24bn loss in 2008. The bonuses for staff in 2010 topped £950 million. The CEO Stephen Hester got £8 million in payments for the year. Len McCluskey
Leonard David McCluskey (born 23 July 1950) is a British trade unionist. He was General Secretary of Unite the Union, the largest affiliate and a major donor to the Labour Party. As a young adult, he spent some years working in the Liverpool D ...
, the general secretary of Unite the Union
Unite the Union, commonly known as Unite, is a British and Irish trade union which was formed on 1 May 2007 by the merger of Amicus and the Transport and General Workers' Union (TGWU). Unite is the second largest trade union in the UK (after ...
, said: "Taxpayers will be baffled as to how it is possible that while we own 84% of this bank it continues to so handsomely reward its investment bankers."
In October 2011, Moody's
Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Investors Service provides international ...
downgraded the credit rating of 12 UK financial firms, including RBS, blaming financial weakness.
In January 2012, there was press controversy about Hester's bonus—Hester was offered share options with a total value of £963,000 that would be held in long-term plans, and only paid out if he met strict and tough targets. If he failed to do this, it would be clawed-back. The Treasury permitted the payment because they feared the resignation of Hester and much of the board if the payment was vetoed by the government as the majority shareholder. After a large amount of criticism[Sir Philip Hampton waives £1.4m share award]
The Telegraph, 28 January 2012 in the press, news emerged of Chairman Sir Philip Hampton turning down his own bonus of £1.4 million several weeks before the controversy.[ Hester, who had been on holiday in Switzerland at the time, turned down his own bonus shortly after.
In June 2012, a failure of an upgrade to payment processing software meant that a substantial proportion of customers could not transfer money to or from their accounts. This meant that RBS had to open a number of branches on a Sunday – the first time that they had had to do this.
RBS released a statement on 12 June 2013 that announced a transition in which CEO Stephen Hester would stand down in December 2013 for the financial institution "to return to private ownership by the end of 2014". For his part in the procession of the transition, Hester would receive 12 months' pay and benefits worth £1.6 million, as well as the potential for £4 million in shares. The RBS stated that, as of the announcement, the search for Hester's successor would commence. Ross McEwan, the head of retail banking at RBS, was selected to replace Hester in July 2013.
On 4 August 2015 the UK government began the process of selling shares back to the private sector, reducing its ownership of ordinary shares from 61.3% to 51.5% and its total economic ownership (including B shares) from 78.3% to 72.9%. On 5 June 2018 the government reduced its ownership through ]UK Government Investments
UK Government Investments (UKGI) is a company owned by the Government of the United Kingdom which combines the former functions of the Shareholder Executive and UK Financial Investments based in London, England.
UKGI manages a portfolio of 17 ...
to 62.4% at a loss of £2 billion.
Restructuring
In June 2008 RBS sold its subsidiary Angel Trains
Angel Trains is a British rolling stock company (ROSCO). Together with Eversholt Rail Group and Porterbrook, it is one of the three original ROSCOs.
Angel Trains was established in March 1994 as part of the privatisation of British Rail. In ...
for £3.6bn as part of an assets sale to raise cash.
In March 2009, RBS announced the closure of its tax avoidance
Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. A tax shelter is one type of tax avoidance, and tax havens are jurisdict ...
department, which had helped it avoid £500m of tax by channelling billions of pounds through securitised assets in tax haven
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
s such as the Cayman Islands
The Cayman Islands () is a self-governing British Overseas Territory—the largest by population in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located to the ...
. The closure was partly due to a lack of funds to continue the measures, and partly due to the 84% government stake in the bank.[RBS avoided £500m of tax in global deals](_blank)
''The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
'', 13 March 2009
On 29 March 2010, GE Capital
GE Capital is the financial services division of General Electric.
The company currently only runs one division, GE Energy Financial Services. It had provided additional services in the past; however, those units were sold between 2013 and 2018. ...
acquired Royal Bank of Scotland's factoring business in Germany. GE Capital signed an agreement with the Royal Bank of Scotland plc (RBS) to acquire 100% of RBS Factoring GmbH, RBS's factoring and invoice financing business in Germany, for an undisclosed amount. The transaction is subject to a number of conditions, including regulatory approval.
In January 2012, due to pressure from the UK government to shut down risky operations and prepare for tougher international regulations, the bank announced it would cut 4,450 jobs and close its loss-making cash equities, corporate broking, equity capital markets, and mergers and acquisitions businesses. This move brought the total number of jobs cut since the bank was bailed out in 2008 to 34,000.
During 2012, RBS separated its insurance business from the main group to form the Direct Line Group
Direct Line Insurance Group plc is a British insurance company based in the United Kingdom, formed in 2012 by the divestment of The Royal Bank of Scotland Group's (RBS) insurance division, through an initial public offering. The company owns a ...
, made up of several well-known brands including Direct Line
Direct Line is an insurance company based in Bromley, England. Founded in 1985, as the country's first direct car insurance company, it has since expanded to offer a range of general insurance products. Its policies are underwritten by the regul ...
and Churchill
Sir Winston Leonard Spencer Churchill (30 November 187424 January 1965) was a British statesman, soldier, and writer who served as Prime Minister of the United Kingdom twice, from 1940 to 1945 during the Second World War, and again from 1 ...
. RBS sold a 30% holding in the group through an initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
in October 2012. Further shares sales in 2013 reduced RBS' holding to 28.5% by September 2013, and RBS sold its remaining shares in February 2014.
In October 2015, RBS sold its remaining stake in Citizens Financial Group
Citizens Financial Group, Inc. is an American bank headquartered in Providence, Rhode Island, which operates in the states of Connecticut, Delaware, Florida, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsyl ...
, having progressively reduced its stake through an initial public offering
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
(IPO) started in 2014.
Williams & Glyn divestment
As a condition of the British Government purchasing an 81% shareholding in the group, the European Commission
The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body o ...
ruled that the group sell a portion of its business, as the purchase was categorised as state aid. In August 2010, the group reached an agreement to sell 318 branches to Santander UK
Santander UK plc (, ) is a British bank, wholly owned by the Spanish Santander Group. Santander UK plc manages its affairs autonomously, with its own local management team, responsible solely for its performance.
Santander UK is one of the l ...
, made up of the RBS branches in England and Wales and the NatWest branches in Scotland. Santander withdrew from the sale on 12 October 2012.
In September 2013, the group confirmed it had reached an agreement to sell 314 branches to the Corsair consortium, made up of private equity firms and a number of institutional investors, including the Church Commissioners
The Church Commissioners is a body which administers the property assets of the Church of England. It was established in 1948 and combined the assets of Queen Anne's Bounty, a fund dating from 1704 for the relief of poor clergy, and of the Eccle ...
, which controls the property and investment assets of the Church of England
The Church of England (C of E) is the established Christian church in England and the mother church of the international Anglican Communion. It traces its history to the Christian church recorded as existing in the Roman province of Britain ...
. The branches, incorporating 250,000 small business customers, 1,200 medium business customers and 1.8 million personal banking customers, were due to be separated from the group in 2016 as a standalone business. The planned company would have traded as an ethical bank, using the dormant Williams & Glyn's brand.
In August 2016, RBS cancelled its plan to spin off Williams & Glyn as a separate business, stating that the new bank could not survive independently. It revealed it would instead seek to sell the operation to another bank.
In February 2017, HM Treasury suggested that the bank should abandon the plan to sell the operation, and instead focus on initiatives to boost competition within business banking in the United Kingdom. This plan was formally approved by the European Commission in September 2017.
2020 group rebranding
On 14 February 2020, it was announced that RBS Group was to be renamed NatWest Group, taking the brand under which the majority of its business is delivered. On 16 July 2020 the company announced that the rebrand would take place on 22 July 2020. The change took effect on 23 July 2020. The NatWest Group is likely to remain state-owned until March 2025, a deadline which the UK Treasury has announced for selling all government shares in the business.
Further Government share sales
The government reduced its holding in NatWest to 59.8% in March 2021, losing the taxpayer £1.8bn, followed by a further sale in May 2021 bringing it to 54.8%. The government announced that a further sale would take place in late 2021 (bringing the holding down to 50.6%) and a sale in March 2022 reduced it further to 48.1%.
Corporate structure
NatWest Group is split into four main customer-facing franchises, each with several subsidiary businesses, and it also has a number of support functions.
Retail banking
's_headquarters_in_Fleet_Street">Child_&_Co's_headquarters_in_Fleet_Street._The_brand_focuses_on_private_banking..html" ;"title="Fleet_Street.html" ;"title="Child & Co's headquarters in Fleet Street">Child & Co's headquarters in Fleet Street. The brand focuses on private banking.">Fleet_Street.html" ;"title="Child & Co's headquarters in Fleet Street">Child & Co's headquarters in Fleet Street. The brand focuses on private banking.
The NatWest Holdings segment comprises the retail banking division of the bank: the business operates in the United Kingdom and the Republic of Ireland under the NatWest, Royal Bank of Scotland and Ulster Bank names. The CEO of this franchise is David Lindberg appointed in September 2020. Key subsidiaries include:
* NatWest
* Royal Bank of Scotland
* Ulster Bank
Commercial banking
This franchise serves UK corporate and commercial customers, from SMEs to UK-based multinationals, and is the largest provider of banking, finance and risk management services to UK corporate and commercial customers. It also contains Lombard entity providing asset finance to corporate and commercial customers as well as some of the clients within the Private Banking franchise. The CEO of this franchise is Paul Thwaite appointed in November 2019.
Private banking
This franchise serves high-net-worth customers, the CEO of this franchise is Peter Flavel appointed in March 2016. The key private banking
Private banking is banking, investment and other financial services provided by banks and financial institutions primarily serving high-net-worth individuals (HNWIs)—defined as those with very high levels of income or sizable assets. A bank that ...
subsidiaries and brands of NatWest Group that are included in this franchise are:
* Coutts
Coutts & Co. is a London-headquartered private bank and wealth manager. Founded in 1692, it is the eighth oldest bank in the world. Today, Coutts forms part of NatWest Group's wealth management division. In the Channel Islands and the Isle of ...
* Adam & Company
* Drummonds Bank
Messrs. Drummond is a formerly independent private bank that is now owned by NatWest Group. The Royal Bank of Scotland incorporating Messrs. Drummond, Bankers is based at 49 Charing Cross in central London. Drummonds is authorised as a brand of ...
* Child & Co
Child & Co. is a private bank. Founded in 1664, it is the oldest bank in the United Kingdom, and the third oldest bank in the world. Formerly independent, it is now owned by the NatWest Group. The Royal Bank of Scotland incorporating Child & Co ...
* NatWest and RBS Premier Banking
NatWest markets
This segment, commonly referred to as the investment banking
Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
arm of NatWest Group, provides investment banking services and integrated financial solutions to major corporations and financial institutions around the world. NWMs areas of strength are debt financing, risk management, and investment and advisory services. NatWest Markets Securities is a key subsidiary, operating in the United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
. The CEO of this franchise is Robert Begbie appointed in June 2020.
Support functions
The group is supported by a number of functions and services departments – procurement, technology, payments, anti-money laundering, property, etc. – and support and control functions: the areas which provide core services across the bank – human resources, corporate governance, internal audit, legal, risk, etc.
Senior leadership
* ''Chairman:'' Sir Howard Davies
Sir Howard John Davies (born 12 February 1951) is a British economist and author, who is the chairman of NatWest Group and the former director of the London School of Economics.
He was the first chairman of the Financial Services Authority. Da ...
(since September 2015)
* ''Chief Executive:'' Alison Rose (since November 2019)
List of former Chairmen
# Sir James Blair-Cunynghame (1969–1978)
# Sir Michael Herries (1978–1991)
# Lord Younger (1991–2001)
# Sir George Mathewson (2001–2006)
# Sir Tom McKillop (2006–2008)
# Sir Philip Hampton (2009–2015)
List of former Chief Executives
''Prior to 1976, the Group served as a holding company and had no executive powers; the position of Managing Director was created in 1976, and was renamed Group Chief Executive following the merger with Williams & Glyn's Bank
Williams & Glyn's Bank Limited was established in London in 1970, when the Royal Bank of Scotland merged its two subsidiaries in England and Wales, Williams Deacon's Bank Ltd. and Glyn, Mills & Co. In 1985, Williams & Glyn's was fully absorbed ...
in 1985.''
#John Burke (1976–1982)
#Sid Procter (1982–1985)
#Charles Winter (1985–1991)
# Sir George Mathewson (1992–2001)
#Fred Goodwin
Frederick Anderson Goodwin FRSE FCIBS (born 17 August 1958) is a Scottish chartered accountant and former banker who was Chief Executive Officer (CEO) of the Royal Bank of Scotland Group (RBS) between 2001 and 2009.
From 2000 to 2008, he pre ...
(2001–2008)
# Stephen Hester (2008–2013)
# Ross McEwan
Ross Maxwell McEwan (born 16 July 1957) is a New Zealand banker, and the chief executive officer (CEO) and managing director of National Australia Bank.
He was previously the chief executive officer (CEO) of The Royal Bank of Scotland Group ...
(2013–2019)
Controversies
Media commentary and criticism
During Goodwin's tenure as CEO he attracted some criticism for lavish spending, including on the construction of a £350m headquarters in Edinburgh opened by Queen Elizabeth II
Elizabeth II (Elizabeth Alexandra Mary; 21 April 1926 – 8 September 2022) was Queen of the United Kingdom and other Commonwealth realms from 6 February 1952 until Death and state funeral of Elizabeth II, her death in 2022. She was queen ...
in 2005 and a $500m headquarters in the US begun in 2006,[''Slate'', 1 December 200]
Who's the World's Worst Banker?
/ref> and the use of a Dassault Falcon 900
The Dassault Falcon 900, commonly abbreviated as the F900, is a French-built corporate trijet aircraft made by Dassault Aviation.
Development
The Falcon 900 is a development of the Falcon 50, itself a development of the earlier Falcon 20. Th ...
jet owned by leasing
A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...
subsidiary Lombard for occasional corporate travel.
In February 2009 RBS reported that while Fred Goodwin was at the helm it had posted a loss of £24.1bn, the biggest loss in UK corporate history.['']The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
'', 26 February 2009
RBS record losses raise prospect of 95% state ownership
/ref> His responsibility for the expansion of RBS, which led to the losses, has drawn widespread criticism. His image was not enhanced by the news that emerged in questioning by the Treasury Select Committee
The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons in the Parliament of the United Kingdom. The remit of the committee is to examine the expenditure, administr ...
of the House of Commons
The House of Commons is the name for the elected lower house of the bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of parliament. ...
on 10 February 2009, that Goodwin has no technical bank training, and has no formal banking qualifications.
In January 2009 ''The Guardian
''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...
s City editor Julia Finch identified him as one of twenty-five people who were at the heart of the financial meltdown. Nick Cohen
Nicholas Cohen (born 1961) is a British journalist, author and political commentator. He was a columnist for '' The Observer'' and a blogger for '' The Spectator''. Following accusations of sexual harassment, he left The Observer in 2022 and be ...
described Goodwin in ''The Guardian'' as "the characteristic villain of our day", who made £20m from RBS and left the government "with an unlimited liability for the cost of cleaning up the mess". An online column by Daniel Gross labelled Goodwin "The World's Worst Banker", a phrase echoed elsewhere in the media.['']The Times
''The Times'' is a British daily national newspaper based in London. It began in 1785 under the title ''The Daily Universal Register'', adopting its current name on 1 January 1788. ''The Times'' and its sister paper ''The Sunday Times'' (fou ...
'', 20 January 2009
Hubris to nemesis: how Sir Fred Goodwin became the 'world's worst banker'
/ref>['' The Journal'', 26 January 2009]
RBS's Fred Goodwin: the world's worst banker?
Gordon Prentice
Gordon Prentice (born 28 January 1951) is a British former politician of the Labour Party who was the Member of Parliament (MP) for Pendle in Lancashire from 1992 to 2010.
Early life
He was educated at the independent George Heriot's School i ...
MP argued that his knighthood should be revoked as it is "wholly inappropriate and anomalous for someone to retain such a reward in these circumstances."
Other members have also frequently been criticised as " fat cats" over their salary, expenses, bonuses and pensions.
Fossil fuel financing
RBS was challenged over its financing of oil and coal mining by charities such as Platform London and Friends of the Earth
Friends of the Earth International (FoEI) is an international network of environmental organizations in 73 countries. The organization was founded in 1969 in San Francisco by David Brower, Donald Aitken and Gary Soucie after Brower's split with ...
. In 2007, RBS was promoting itself as "The Oil & Gas Bank", although the website www.oilandgasbank.com was later taken down. A Platform London report criticised the bank's lending to oil and gas companies, estimating that the carbon emissions embedded within RBS' project finance reached 36.9 million tonnes in 2005, comparable to Scotland's carbon emissions.
RBS provides the financial means for companies to build coal-fired power station
A coal-fired power station or coal power plant is a thermal power station which burns coal to generate electricity. Worldwide, there are about 8,500 coal-fired power stations totaling over 2,000 gigawatts Nameplate capacity, capacity. They ...
s and dig new coal mines at sites throughout the world. RBS helped to provide an estimated £8 billion from 2006 to 2008 to energy corporation E.ON and other coal-utilising companies. In 2012, 2.8% of RBS' total lending was provided to the power, oil and gas sectors combined. According to RBS' own figures, half of its deals to the energy sector were to wind power projects; although, this only included project finance and not general commercial loans.
Huntingdon Life Sciences
In 2000 and 2001, staff of the bank were threatened over its provision of banking facilities for the animal testing company Huntingdon Life Sciences
Huntingdon Life Sciences (HLS) was a contract research organisation (CRO) founded in 1951 in Cambridgeshire, England. It had two laboratories in the United Kingdom and one in the United States. With over 1,600 staff, it was until 2015 the largest ...
. The intimidation resulted in RBS withdrawing the company's overdraft facility, requiring the company to obtain alternative funding within a tight deadline.
Canadian oil sands
Climate Camp
The Camps for Climate Action are Political campaign, campaign gatherings (similar to peace camps) that take place to draw attention to, and act as a base for direct action against, major Global warming#Causes, carbon emitters, as well as to devel ...
activists criticise RBS for funding firms which extract oil from Canadian oil sands
Canadian Oil Sands Limited was a Canadian company that generates income from its oil sands investment in the Syncrude Joint Venture. Syncrude operated an oil sands facility and produced crude oil through the mining of oil sands from ore deposits ...
. The Cree
The Cree ( cr, néhinaw, script=Latn, , etc.; french: link=no, Cri) are a Indigenous peoples of the Americas, North American Indigenous people. They live primarily in Canada, where they form one of the country's largest First Nations in Canada ...
aboriginal group describe RBS as being complicit in "the biggest environmental crime on the planet". In 2012, 7.2% of RBS' total oil and gas lending was to companies who derived more than 10% of their income from oil sands operations.
See also
* List of banks in the United Kingdom
Central bank
The Bank of England is the central bank of the United Kingdom.
The Big Four
British banking has been highly consolidated since the early 20th century. Unlike some other major economies, the UK does not have a major stratum of ind ...
* List of systemically important banks
Certain large banks are tracked and labelled by several authorities as Systemically Important Financial Institutions (SIFIs), depending on the scale and the degree of influence they hold in global and domestic financial markets.
Since 2011, the ...
* Systemically important financial institution
A systemically important financial institution (SIFI) is a bank, insurance company, or other financial institution whose failure might trigger a financial crisis. They are colloquially referred to as "too big to fail".
As the financial crisis o ...
* Too big to fail
"Too big to fail" (TBTF) and "too big to jail" is a theory in banking and finance that asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the great ...
* European Financial Services Roundtable
* High-yield debt
* Inter-Alpha Group of Banks
References
External links
*
{{authority control
NatWest Group
1969 establishments in Scotland
Banks established in 1969
Banks of Scotland
Companies of Scotland
Companies based in Edinburgh
Companies listed on the London Stock Exchange
Companies listed on the New York Stock Exchange
Government-owned companies of the United Kingdom
Investment banks
Organisations based in Edinburgh with royal patronage