Is NatWest about to be taken over because a backstairs cabal of the
most powerful City investment managers has lost all faith in the
That was the titbit served up by City hacks two weeks ago to a
Why has the City made such a meal of it? And has NatWest made the
situation worse or better? Where did it all start? And could the stream
of speculation have been stemmed before it became a flood? Was it news
manipulation in an overheated market in bank shares or was it just
Probably the least remarked aspect of this sea change in the image of
the UK’s largest and most solidly-based high street bank is the radical
shift in the balance of power in finance over the past six months. The
flotations of the Halifax and other building societies has totally
changed the banking terrain of Britain.
It seems NatWest recognised the significance of this. They made a
surreptitious approach to try to take over ex-building society rival
If the board had managed to pull this off and had taken any trouble to
get their City communications right in advance, they would have been
hailed triumphant. But the reverse was true.
This was compounded by the pounds 90 million ’black hole’ in the books
of NatWest Markets. The head of the investment bank Martin Owen fell on
his sword to a background of personality assassination and a never-very
convincing internal enquiry. The staff of the bank, incensed for months
after a forced marriage to George Magan’s mergers boutique and swathes
of redundancies, were hardly allies. And after all that history, some
wag in the HQ bunker was heard to say: ’We might just get rid of it all
- it’s not that important.’
At which point the City’s collective patience seems to have cracked.
Past NatWest disasters were dragged out of collective memory. The bank’s
response was to publicy announce the cancellation of chairman
Alexander’s junket to the Hong Kong handover ’in order to reassure City
Thereby of course, confirming they needed it.
NatWest has been unlucky in circumstance, didn’t see the writing on the
wall until too late and then badly misread its audience. Rebuilding its
City and internal reputations, if it have the will to pull it off, will
be a long-term project that needs to start tomorrow. But amazing as it
will seem, many of the punters will be blissfully unaware, and the
majority of the rest won’t care very much at all.