National Westminster Bank, commonly known as NatWest, is a major retail and commercial bank in the United Kingdom. It was established in 1968 by the merger of National Provincial Bank (established 1833 as National Provincial Bank of England) and Westminster Bank (established 1834 as London County and Westminster Bank). Since 2000, it has been part of The Royal Bank of Scotland Group. Following "ringfencing" of the Group's core domestic business, the bank became a direct subsidiary of NatWest Holdings; NatWest Markets comprises the non-ringfenced investment banking arm.
NatWest is considered one of the Big Four clearing banks in the UK,[1] and it has a large network of over 960 branches[2] and 3,400 cash machines across Great Britain and offers 24-hour Actionline telephone and online banking services. Today, it has more than 7.5 million personal customers and 850,000 small business accounts. In Ireland, it operates through its Ulster Bank subsidiary. In 2017, NatWest was awarded Best Banking App in the British Bank Awards
The bank's origins date back to 1658 with the foundation of Smith's Bank of Nottingham.[4]
Its oldest direct corporate ancestor, National Provincial Bank, was formed in 1833 as the National Provincial Bank of England. It merged with Union of London and Smith's Bank in 1918 to become National Provincial and Union Bank, shortening its name in 1924. National Provincial acquired District Bank (formerly Manchester and Liverpool District Banking Company) in 1962, but continued to operate District's branch network separately. Westminster Bank was formed in 1834 as London and Westminster Bank. It merged with London and County Bank in 1909 to become London County and Westminster Bank and with Parr's Bank in 1918 to become London County Westminster and Parrs Bank, shortening its name in 1923.
The creation of the modern bank was announced in 1968, and National Westminster Bank Limited commenced trading on 1 January 1970, after the statutory process of integration had been completed in 1969.[5] The famous three arrowheads symbol was adopted as the new bank's logo; it is said to symbolise either the circulation of money in the financial system or the bank's three constituents, National Provincial Bank, Westminster Bank, and District Bank (established 1829):[6] the latter had been taken over by National Provincial Bank in 1962 and was allowed to operate under its own name until the formation of National Westminster Bank. The District, National Provincial, and Westminster Banks were fully integrated in the new firm's structure, but private bankers Coutts & Co. (a 1920 National Provincial acquisition, established 1692), Ulster Bank in Northern Ireland (a 1917 Westminster acquisition, established 1836) and the Isle of Man Bank (a 1961 National Provincial acquisition, established 1865) continued as separate operations. Westminster Foreign Bank (established 1913) was restyled International Westminster Bank in 1973. Duncan Stirling, outgoing chairman of Westminster Bank, became first chairman of the fifth largest bank in the world.[7] In 1969 David Robarts, former chairman of National Provincial, assumed Stirling's position.[8] In 1975 it was one of the first London banks to open a representative office in Scotland. It was a founder member of the Joint Credit Card Company (with Lloyds Bank, Midland Bank and Williams & Glyn's Bank) which launched the Access credit card (now part of MasterCard) in 1972 and in 1976 it introduced the Servicetill cash machine. The same banks, excluding Lloyds, were later responsible for the introduction of the Switch debit card (later branded Maestro) in 1988.[9]
Expansion
Deregulation in the 1980s, culminating in the Big Bang in 1986, also encouraged the bank to enter the securities business. County Bank, its merchant banking subsidiary formed in 1965, acquired various stockbroking and jobbing firms to create the investment banking arm County NatWest. National Westminster Home Loans was established in 1980 and other initiatives included the launch of the Piggy Account for children in 1983, the Credit Zone, a flexible overdraft facility on which customers only pay interest (now commonplace, this so-called pink debt was innovative when launched) and the development of the Mondex electronic purse (later sold to MasterCard Worldwide) in 1990.[10] The Action Bank advertising campaign spearheaded a new marketing-led approach to business development. Under the direction of Robin Leigh-Pemberton, later Lord Kingsdown, who became chairman in 1977, the bank also expanded internationally, forming National Westminster Bancorp in the United States of America with a network of 340 branches across two states, National Westminster Bank of Canada and NatWest Australia Bank; and opening branches on the European continent and in the Far East.[11] In 1982, the Frankfurt office of International Westminster Bank merged with Global Bank AG to form Deutsche Westminster Bank. In 1985, Banco NatWest España was formed and National Westminster Bank SA was incorporated in 1988, taking over the bank's six branches in France and Monaco. In 1989, International Westminster Bank was merged into National Westminster Bank by Act of Parliament.
Deregulation in the 1980s, culminating in the Big Bang in 1986, also encouraged the bank to enter the securities business. County Bank, its merchant banking subsidiary formed in 1965, acquired various stockbroking and jobbing firms to create the investment banking arm County NatWest. National Westminster Home Loans was established in 1980 and other initiatives included the launch of the Piggy Account for children in 1983, the Credit Zone, a flexible overdraft facility on which customers only pay interest (now commonplace, this so-called pink debt was innovative when launched) and the development of the Mondex electronic purse (later sold to MasterCard Worldwide) in 1990.[10] The Action Bank advertising campaign spearheaded a new marketing-led approach to business development. Under the direction of Robin Leigh-Pemberton, later Lord Kingsdown, who became chairman in 1977, the bank also expanded internationally, forming National Westminster Bancorp in the United States of America with a network of 340 branches across two states, National Westminster Bank of Canada and NatWest Australia Bank; and opening branches on the European continent and in the Far East.[11] In 1982, the Frankfurt office of International Westminster Bank merged with Global Bank AG to form Deutsche Westminster Bank. In 1985, Banco NatWest España was formed and National Westminster Bank SA was incorporated in 1988, taking over the bank's six branches in France and Monaco. In 1989, International Westminster Bank was merged into National Westminster Bank by Act of Parliament.
In 2008, it was announced that HM Government would take a stake of up to 58% in the Royal Bank of Scotland in a move aimed at recapitalising the Group. HM Treasury subscribed for £5 billion in preference shares and underwrote the issuance of £15bn of new ordinary shares offered to RBS shareholders and new institutional shareholders at the fixed price of 65.5p.[32] As a consequence of the mismanagement which necessitated this rescue, the chief executive, Fred Goodwin (who secured the takeover of NatWest), offered his resignation, which was duly accepted. Chairman Sir Tom McKillop also confirmed he would stand down from that role when his contract expired in 2009. Goodwin was replaced by Stephen Hester, previously chief executive of British Land.
In 2009 the RBS Group announced that it would divest all 311 RBS branches in England and Wales (until 1985, Williams and Glyn's) together with the seven NatWest branches in Scotland as a standalone business, to comply with European Commission state aid requirements.[33][34] In August 2010, it was announced that the branches would be sold to Santander UK, along with the accounts of 1.8 million personal customers and 244,000 SME customers.[35] Santander withdrew from the sale in October 2012.[36] On 27 September 2013, the RBS Group confirmed it had agreed to sell 308 RBS branches in England and Wales and 6 NatWest branches in Scotland to the Corsair consortium. This figure was reduced to 307 by May 2015.[37] The branches were to have been separated from the group in 2016 as a standalone business operating under the previously dormant Williams & Glyn's brand.[38]
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 division to another bank.[39] In February 2017, HM Treasury and the European Commission reached a provisional agreement in which RBS would be able to retain the Williams & Glyn assets in return for investing £750 million into a fund aimed at increasing SME lending by challenger banks and for RBS agreeing to allow SME customers of challenger banks to use its branch network for cash and cheque handling.[40] The European Commission confirmed in April 2017 that it would scrutinise the proposal.[41]
Recent developments
On 20 March 2017 the British paper The Guardian reported that hundreds of banks had helped launder KGB-related funds out of Russia, as uncovered by an investigation named Global Laundromat. NatWest was listed among the 17 banks in the UK that were “facing questions over what they knew about the international scheme and why they did not turn away suspicious money transfers,” as the bank processed $1.1 million in Laundromat cash. Other banks facing scrutiny under the investigation included HSBC, the Royal Bank of Scotland, Lloyds, Barclays and Coutts.[42]
Structure
The Royal Bank of Scotland Group Plc operates internationally through its four principal subsidiaries: NatWest Holdings Limited which owns The Royal Bank of Scotland plc, National Westminster Bank plc, and Ulster Bank Ireland DAC; NatWest Markets plc; NatWest Markets N.V.; and The Royal Bank of Scotland International (Holdings) Limited. The NatWest group of companies comprises National Westminster Bank and its subsidiary and associated undertakings.[44] As of 2019, the principal subsidiary undertakings of NatWest are:
Coutts & Co.
Ulster Bank Limited
Nordisk Renting
Lombard North Central plc[45]
Structurally, National Westminster Bank was a wholly owned subsidiary of The Royal Bank of Scotland Group until 2003, when ownership of the bank's entire issued ordinary share capital was transferred to The Royal Bank of Scotland as holding company, with RBS Group functioning as ultimate holding company. At the same time the entire issued share capital of Lombard North Central Plc was transferred by the bank to the holding company,[46] transferring back to NatWest in 2017. Ownership of National Westminster Home Loans Limited was passed to the holding company in 2005;[47] however, the mortgage portfolio and related funding were also transferred back to NatWest in 2012.[48] In 2000, the bank transferred National Westminster Life Assurance Limited to RBS Life Investments Limited, effectively establishing the business as a joint venture between the Group and Norwich Union.[49] In 2018, ownership of both NatWest and the Royal Bank transferred to NatWest Holdings Limited, a direct subsidiary of RBS Group.
NatWest is considered one of the Big Four clearing banks in the UK,[1] and it has a large network of over 960 branches[2] and 3,400 cash machines across Great Britain and offers 24-hour Actionline telephone and online banking services. Today, it has more than 7.5 million personal customers and 850,000 small business accounts. In Ireland, it operates through its Ulster Bank subsidiary. In 2017, NatWest was awarded Best Banking App in the British Bank Awards
The bank's origins date back to 1658 with the foundation of Smith's Bank of Nottingham.[4]
Its oldest direct corporate ancestor, National Provincial Bank, was formed in 1833 as the National Provincial Bank of England. It merged with Union of London and Smith's Bank in 1918 to become National Provincial and Union Bank, shortening its name in 1924. National Provincial acquired District Bank (formerly Manchester and Liverpool District Banking Company) in 1962, but continued to operate District's branch network separately. Westminster Bank was formed in 1834 as London and Westminster Bank. It merged with London and County Bank in 1909 to become London County and Westminster Bank and with Parr's Bank in 1918 to become London County Westminster and Parrs Bank, shortening its name in 1923.
The creation of the modern bank was announced in 1968, and National Westminster Bank Limited commenced trading on 1 January 1970, after the statutory process of integration had been completed in 1969.[5] The famous three arrowheads symbol was adopted as the new bank's logo; it is said to symbolise either the circulation of money in the financial system or the bank's three constituents, National Provincial Bank, Westminster Bank, and District Bank (established 1829):[6] the latter had been taken over by National Provincial Bank in 1962 and was allowed to operate under its own name until the formation of National Westminster Bank. The District, National Provincial, and Westminster Banks were fully integrated in the new firm's structure, but private bankers Coutts & Co. (a 1920 National Provincial acquisition, established 1692), Ulster Bank in Northern Ireland (a 1917 Westminster acquisition, established 1836) and the Isle of Man Bank (a 1961 National Provincial acquisition, established 1865) continued as separate operations. Westminster Foreign Bank (established 1913) was restyled International Westminster Bank in 1973. Duncan Stirling, outgoing chairman of Westminster Bank, became first chairman of the fifth largest bank in the world.[7] In 1969 David Robarts, former chairman of National Provincial, assumed Stirling's position.[8] In 1975 it was one of the first London banks to open a representative office in Scotland. It was a founder member of the Joint Credit Card Company (with Lloyds Bank, Midland Bank and Williams & Glyn's Bank) which launched the Access credit card (now part of MasterCard) in 1972 and in 1976 it introduced the Servicetill cash machine. The same banks, excluding Lloyds, were later responsible for the introduction of the Switch debit card (later branded Maestro) in 1988.[9]
Expansion
Deregulation in the 1980s, culminating in the Big Bang in 1986, also encouraged the bank to enter the securities business. County Bank, its merchant banking subsidiary formed in 1965, acquired various stockbroking and jobbing firms to create the investment banking arm County NatWest. National Westminster Home Loans was established in 1980 and other initiatives included the launch of the Piggy Account for children in 1983, the Credit Zone, a flexible overdraft facility on which customers only pay interest (now commonplace, this so-called pink debt was innovative when launched) and the development of the Mondex electronic purse (later sold to MasterCard Worldwide) in 1990.[10] The Action Bank advertising campaign spearheaded a new marketing-led approach to business development. Under the direction of Robin Leigh-Pemberton, later Lord Kingsdown, who became chairman in 1977, the bank also expanded internationally, forming National Westminster Bancorp in the United States of America with a network of 340 branches across two states, National Westminster Bank of Canada and NatWest Australia Bank; and opening branches on the European continent and in the Far East.[11] In 1982, the Frankfurt office of International Westminster Bank merged with Global Bank AG to form Deutsche Westminster Bank. In 1985, Banco NatWest España was formed and National Westminster Bank SA was incorporated in 1988, taking over the bank's six branches in France and Monaco. In 1989, International Westminster Bank was merged into National Westminster Bank by Act of Parliament.
Deregulation in the 1980s, culminating in the Big Bang in 1986, also encouraged the bank to enter the securities business. County Bank, its merchant banking subsidiary formed in 1965, acquired various stockbroking and jobbing firms to create the investment banking arm County NatWest. National Westminster Home Loans was established in 1980 and other initiatives included the launch of the Piggy Account for children in 1983, the Credit Zone, a flexible overdraft facility on which customers only pay interest (now commonplace, this so-called pink debt was innovative when launched) and the development of the Mondex electronic purse (later sold to MasterCard Worldwide) in 1990.[10] The Action Bank advertising campaign spearheaded a new marketing-led approach to business development. Under the direction of Robin Leigh-Pemberton, later Lord Kingsdown, who became chairman in 1977, the bank also expanded internationally, forming National Westminster Bancorp in the United States of America with a network of 340 branches across two states, National Westminster Bank of Canada and NatWest Australia Bank; and opening branches on the European continent and in the Far East.[11] In 1982, the Frankfurt office of International Westminster Bank merged with Global Bank AG to form Deutsche Westminster Bank. In 1985, Banco NatWest España was formed and National Westminster Bank SA was incorporated in 1988, taking over the bank's six branches in France and Monaco. In 1989, International Westminster Bank was merged into National Westminster Bank by Act of Parliament.
In 2008, it was announced that HM Government would take a stake of up to 58% in the Royal Bank of Scotland in a move aimed at recapitalising the Group. HM Treasury subscribed for £5 billion in preference shares and underwrote the issuance of £15bn of new ordinary shares offered to RBS shareholders and new institutional shareholders at the fixed price of 65.5p.[32] As a consequence of the mismanagement which necessitated this rescue, the chief executive, Fred Goodwin (who secured the takeover of NatWest), offered his resignation, which was duly accepted. Chairman Sir Tom McKillop also confirmed he would stand down from that role when his contract expired in 2009. Goodwin was replaced by Stephen Hester, previously chief executive of British Land.
In 2009 the RBS Group announced that it would divest all 311 RBS branches in England and Wales (until 1985, Williams and Glyn's) together with the seven NatWest branches in Scotland as a standalone business, to comply with European Commission state aid requirements.[33][34] In August 2010, it was announced that the branches would be sold to Santander UK, along with the accounts of 1.8 million personal customers and 244,000 SME customers.[35] Santander withdrew from the sale in October 2012.[36] On 27 September 2013, the RBS Group confirmed it had agreed to sell 308 RBS branches in England and Wales and 6 NatWest branches in Scotland to the Corsair consortium. This figure was reduced to 307 by May 2015.[37] The branches were to have been separated from the group in 2016 as a standalone business operating under the previously dormant Williams & Glyn's brand.[38]
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 division to another bank.[39] In February 2017, HM Treasury and the European Commission reached a provisional agreement in which RBS would be able to retain the Williams & Glyn assets in return for investing £750 million into a fund aimed at increasing SME lending by challenger banks and for RBS agreeing to allow SME customers of challenger banks to use its branch network for cash and cheque handling.[40] The European Commission confirmed in April 2017 that it would scrutinise the proposal.[41]
Recent developments
On 20 March 2017 the British paper The Guardian reported that hundreds of banks had helped launder KGB-related funds out of Russia, as uncovered by an investigation named Global Laundromat. NatWest was listed among the 17 banks in the UK that were “facing questions over what they knew about the international scheme and why they did not turn away suspicious money transfers,” as the bank processed $1.1 million in Laundromat cash. Other banks facing scrutiny under the investigation included HSBC, the Royal Bank of Scotland, Lloyds, Barclays and Coutts.[42]
Structure
The Royal Bank of Scotland Group Plc operates internationally through its four principal subsidiaries: NatWest Holdings Limited which owns The Royal Bank of Scotland plc, National Westminster Bank plc, and Ulster Bank Ireland DAC; NatWest Markets plc; NatWest Markets N.V.; and The Royal Bank of Scotland International (Holdings) Limited. The NatWest group of companies comprises National Westminster Bank and its subsidiary and associated undertakings.[44] As of 2019, the principal subsidiary undertakings of NatWest are:
Coutts & Co.
Ulster Bank Limited
Nordisk Renting
Lombard North Central plc[45]
Structurally, National Westminster Bank was a wholly owned subsidiary of The Royal Bank of Scotland Group until 2003, when ownership of the bank's entire issued ordinary share capital was transferred to The Royal Bank of Scotland as holding company, with RBS Group functioning as ultimate holding company. At the same time the entire issued share capital of Lombard North Central Plc was transferred by the bank to the holding company,[46] transferring back to NatWest in 2017. Ownership of National Westminster Home Loans Limited was passed to the holding company in 2005;[47] however, the mortgage portfolio and related funding were also transferred back to NatWest in 2012.[48] In 2000, the bank transferred National Westminster Life Assurance Limited to RBS Life Investments Limited, effectively establishing the business as a joint venture between the Group and Norwich Union.[49] In 2018, ownership of both NatWest and the Royal Bank transferred to NatWest Holdings Limited, a direct subsidiary of RBS Group.
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