NatWest — BrandWiki

NatWest

Overview

National Westminster Bank Plc

trading name	NatWest
type	Private
former name	National Westminster Bank Limited (1968–1981)‡R1R‡
foundation	March 18, 1968‡R1R‡
predecessor	National Provincial Bank Westminster Bank District Bank
location	London, England, UK
key people	Richard Haythornthwaite (chairman) Paul Thwaite (chief executive)
industry	Financial services
products	Banking Investments Lending Insurance
parent	NatWest Holdings‡R2R‡
subsid	Coutts
homepage	https://natwest.com

National Westminster Bank,[3] commonly known as NatWest,[4] 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 became part of The Royal Bank of Scotland Group, which was re-named NatWest Group in 2020. 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 International is a trading name of RBS International, which also sits outside the ringfence.

Between 2008 and 2025, the UK government held a stake in NatWest Group following its £45 billion ($61.87 billion) bailout of the lender which led to it owning 84 per cent at one point.[5][6]

History

Early history (1658–1970s)

The bank's origins date back to 1658 with the foundation of Smith's Bank of Nottingham.[11] 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.[12] District Bank (formed in 1829 as the Manchester and Liverpool District Banking Company) was acquired by National Provincial in 1962 and allowed to operate under its own name.[13] 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.[14]

The creation of the modern bank was announced in 1968 and commenced trading on 1 January 1970 after the statutory process of integration had been completed in 1969.[15] The three arrowheads device 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.[16] 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.[17] In 1969 David Robarts, former chairman of National Provincial, assumed Stirling's position.[18] 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

Expansion (1980s)

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.[20] 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.[21] The Action Bank advertising campaign spearheaded a new marketing-led approach to business development. Under the direction of Robin Leigh-Pemberton, 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.[22] In 1982, the

Controversy (1980s–1990s)

The bank was hit by the stock market crash of 1987 and involvement in the collapse of Blue Arrow.[28] The Department of Trade and Industry report on the affair was critical of the bank's management and resulted in the resignation of several members of the board, including then-chairman Lord Boardman.[29] Later, the bank would divest its overseas subsidiaries. The North American operations were sold to Fleet Bank and Hong Kong Bank of Canada, and the Australian and New Zealand branches were sold to Salomon Smith Barney and the National Australia Bank.[30] Thereafter the bank concentrated on its core domestic business as the restyled NatWest Group, reflecting its modern positioning as a portfolio of businesses.[31]

Takeover (1990s–2000s)

In 1999, the chairman, Lord Alexander of Weedon, announced a merger with Legal & General in a friendly £10.7 billion deal, the first between a bank and an insurance company in UK history.[40] The move was poorly received in the London financial markets and NatWest's share price fell substantially.[41] Seen as a driver of the ill-advised investment banking expansion, Derek Wanless was forced to resign as chief executive following the appointment of Sir David Rowland (who became executive chairman).[42] Also in 1999, in response to the much reduced NatWest market capitalisation, the much smaller Bank of Scotland made a hostile takeover bid for NatWest. The Bank of Scotland's aim was to break up the NatWest Group and dispose of its non-retail assets. NatWest was forced to abandon its merger, but refused to agree to a takeover by a rival bank.[43] The Royal Bank of Scotland

Attempted divestment (2008–2017)

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.[48] As a consequence of the mismanagement that necessitated this rescue, the chief executive, Fred Goodwin (who secured the takeover of NatWest), offered his resignation, which was duly accepted. Chairman 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 (known as Williams & Glyn's until 1985) together with the seven NatWest branches in Scotland as a standalone business, to comply with European Commission state aid requirements.[49][50] 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.[51]

Recent history (2017–present)

On 3 May 2021, the business of Ulster Bank Limited in Northern Ireland was transferred to National Westminster Bank as part of a court-approved Banking Business Transfer Scheme.[58]

In June 2024, NatWest announced it had agreed a deal to acquire the majority of Sainsbury's Bank.[59][60] The deal will see the company acquire one million customers, £2.5 billion of customer assets and £2.6 billion of customer deposits.[59] NatWest will receive £125 million from the deal upon completion in the first half of 2025.[59] In 2024, NatWest also entered into an agreement with Metro Bank plc ("Metro Bank") to acquire a £2.5 billion portfolio of prime UK residential mortgages, with a weighted average current loan to value of c.62%.[61]

Services

NatWest provide a full range of banking and insurance services to personal, business and commercial customers, including the first dedicated bank account in Britain to be delivered and supported entirely in the Polish language. The bank has won Your Mortgage Magazine's Best Bank for Mortgages award 13 times in the last 17 years, more than any other lender.[82]

NatWest provides a digital assistant, Cora, to respond to customer enquiries.[83] In 2023, it handled over 10 million queries.[84] From 2025, the bank entered into a partnership with OpenAI, the first such collaboration by a UK bank, to enhance the chatbot's generative AI capabilities.[85]

Operating under the name Esme Loans, NatWest provided a digital lending platform for SMEs also available to customers not banking with NatWest or RBS.[86] Esme Loans commenced trading on 17 February 2017, after being founded out of the bank's new product development programme NatWest Innovation Cell by Richard Kerton, Veronika Lovett, and Lucy Hasson.[87] Esme loans was closed in 2021.[88]

The bank operates "mobile branches" using converted vans to serve rural areas around St Austell, Swansea, Carlisle, Devon and North Wales.[89][90] The service allows to customers to carry out banking transactions in remote areas where there is no branch. NatWest reintroduced the mobile service in Cornwall in 2005, after HSBC ended its own version due to costs.

In 2006, the then RBS Group undertook the first trial of PayPass contactless debit and credit cards in Europe.[91] In 2019, a NatWest pilot project was the first in the UK to trial debit cards containing fingerprint authentication technology developed by Dutch company, Gemalto.[92]

The bank participates fully in the Faster Payments Service, an initiative to speed up certain payments, launched in 2008.[93] The bank established credit and debit card payment handling company Streamline in 1989, which was merged into Worldpay Group in 2009.[94] The NatWest Mobile Banking app is available to personal account holders over the age of 11 with online banking, a debit card and UK mobile telephone number (beginning 07). The Emergency Cash service gives access to cash without a debit card from NatWest, RBS and Ulster Bank cash machines.[95]

NatWest is a member of the Cheque and Credit Clearing Company, Bankers' Automated Clearing Services, the Clearing House Automated Payment System and the LINK Interchange Network. The bank is authorised by the Prudential Regulation Authority and regulated by both the Financial Conduct Authority and the Prudential Regulation Authority.[96] It is a member of the Financial Ombudsman Service, the Financial Services Compensation Scheme, UK Payments Administration and of the British Bankers' Association; and it subscribes to the Lending Code. Mortgages, available in England, Scotland and Wales only, are provided by National Westminster Home Loans, a member of the Council of Mortgage Lenders,[97]

The NatWest One account is a secured personal account with the Royal Bank of Scotland.

NatWest Insurance Services acts as intermediary and broker for general insurance, policies are underwritten by UK Insurance Limited. Life Protector and Guaranteed Bond products are provided by National Westminster Life Assurance.[98]

The Royal Bank of Scotland International trades as NatWest International in Jersey, Guernsey, the Isle of Man and Gibraltar. In 2010, RBS Intermediary Partners was renamed NatWest Intermediary Solutions.[99]

National Westminster Bank use the following series of six-digit sorting codes formatted into three pairs separated by hyphens:

International Bank Account Numbers take the form GBxx NWBK ssss ssaa aaaa aa, where x refers to two check digits, s to the branch sort code and a to the individual account number. The Bank Identifier Code, or SWIFT code, for NatWest (and Isle of Man Bank) is NWBKGB2L (8 digits) or NWBKGB2Lxxx (11 digits).

Bó, a standalone digital banking app with the aim of helping people save more money was launched in November 2019[100] and discontinued in May 2020.[101]

Mettle is an e-money business account provided by Prepay Solutions, a trading name of Prepay Technologies Ltd.

NatWest also entered the merchant acquiring market by introducing Tyl in 2019.[102] The proposition includes next business day settlement for card transactions.

Controversy

Litigation

The so-called NatWest Three—Giles Darby, David Bermingham and Gary Mulgrew—were extradited to the United States in 2006 on charges relating to a transaction with Enron Corporation in 2000 while they were working for Greenwich NatWest.[103] It has been argued that the alleged crime was committed by British citizens living in the UK against a British company based in London[104] and therefore, any resulting criminal case falls under the jurisdiction of the English courts.[105] However, the Serious Fraud Office decided not to prosecute due to lack of evidence.[106] There has been criticism that the Americans do not have to produce a prima facie case, or even a reasonable one, to extradite British citizens,[107] whereas no such facility exists to extradite US citizens to the UK.[108] On 28 November 2007 the three admitted one charge of wire fraud after a plea bargain.[109] On 22 February 2008 they were each sentenced to 37 months in prison.[110]

Following discussions between the Office of Fair Trading, the Financial Ombudsman Service, the Financial Services Authority and the major banks, proceedings were issued on 27 July 2007 in a test case against the banks to determine the legality and enforceability of certain charges relating to unauthorised overdrafts. It is argued that these are contrary to the Unfair Terms in Consumer Contracts Regulations 1999; Schedule 2(e) of which gives a non-exhaustive list of terms which may be regarded as unfair, such as a term requiring a consumer who fails in his obligation to pay a disproportionately high sum in compensation.[111] Penalty charges are irrecoverable at common law. The precedent for this was Dunlop Pneumatic Tyre Co. Ltd. v New Garage and Motor Co. Ltd. [1915] AC 79 along with Murray v Leisure Play [2005] EWCA Civ 963, where it was held that a contractual party can only recover damages for an actual loss or liquidated losses.[112] The RBS Group maintained that its charges were fair and enforceable and stated it intended to defend its position vigorously.[113] On 24 April 2008, the High Court found that although these charges could not constitute penalties, they are challengeable under the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999.[114]

In September 2009, NatWest announced dramatic cuts in their overdraft fees. The unpaid item fee was reduced to £5 from £38 and the card misuse fee was reduced from £35 to £15.[116] The cuts came at a time when the row over the legality of unauthorised borrowing, estimated to earn current account providers about £2.6 billion a year, had reached the House of Lords.[117]

Computer failures

In late June 2012, the group suffered a major computer malfunction,[118] resulting in some customers' account balances not updating correctly.[119] Completions of some new home purchases were delayed,[120] customers were stranded abroad, and one man was held in prison.[121] As a result of the error, RBS and NatWest announced that over 1,200 of their busiest branches would extend their hours throughout the week, including the bank's first Sunday opening, to enable the customers affected to access cash.[122] On 25 June, over 1,000 branches opened for extended hours,[122] and the number of phone staff was doubled.[123]

"Global laundromat"

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 Bank, Barclays and Coutts.[126]

Money laundering conviction

In December 2021, the bank was convicted at Westminster Magistrates' Court of three counts of failing to comply with anti–money laundering regulations, marking the first time that the Financial Conduct Authority had pursued criminal charges against a financial institution for failings in combating money laundering. NatWest pleaded guilty to the three counts, which concerned a jewelers, Fowler Oldfield, depositing £365 million between 2012 and 2016 of which £264 million was in cash, despite predicted annual turnover of £15 million. FCA lawyers stated that large volumes of cash were deposited in black bin bags, and that the quantity of notes failed to fit within the branch vaults.[127]

In a statement, a spokesman for the Financial Conduct Authority said "'NatWest is responsible for a catalogue of failures in the way it monitored and scrutinised transactions that were self-evidently suspicious. Combined with serious systems failures, like the treatment of cash deposits as cheques, these failures created an open door for money laundering."[128]