LONDON, Sept 30 (IFR) - Royal Bank of Scotland is renaming its corporate and institutional banking (CIB) as NatWest Markets, a throwback to one of the leading securities firms of the 1990s.
The change is part of a restructuring by RBS to meet new rules requiring UK banks to separate domestic retail banking from riskier areas to better protect savers and the taxpayer.
The UK “ring-fencing” rules will be in place by 2019 and the structural changes are proving complex and costly for all Britain’s major banks.
RBS said NatWest Markets will continue to offer financing, rates and currencies to customers.
NatWest, which was bought by RBS in 2000, took advantage of deregulation of the City of London and “Big Bang” in 1986 to build one of the biggest securities firms in London.
County Bank, its merchant bank, bought stockbroking and jobbing firms to create NatWest Investment Bank, which was joined by corporate banking to form NatWest Markets in 1992. It was particularly strong in fixed income.
But RBS has dramatically shrunk its investment bank by cutting its country footprint, business lines and assets since being rescued by the UK government in 2008. The taxpayer still holds 73% of RBS.
RBS will put the majority of its UK and western European banking business in ring-fenced banking entities under an intermediate holding company. The CIB activities will be in a non-ring-fenced bank alongside its international business.
Both will be subsidiaries of RBS Group, which will continue to be the primary issuing entity for funding and capital raising activities. RBS said it will announce any implications for debt issued by RBS’s entities in due course. (Reporting by Steve Slater)