Wednesday, September 29, 1999 Published at 08:48 GMT 09:48 UK
Business: The Company File
Bank job loss fears grow
Branches could close if Royal Bank of Scotland takes over NatWest
Up to 30,000 jobs in the UK could be lost if the Royal Bank of Scotland takes over NatWest Bank.
This is double the number of jobs that unions fear could be lost if the rival Bank of Scotland proceeds with its hostile £20.8bn bid for NatWest, the Guardian newspaper reports.
The newspaper cites Royal Bank proposals which say they would plan to trim the branch network to 1200. NatWest has a branch network of 1700, compared with Royal Bank's network of 600, so under the proposals over one thousand branches could be shut.
So far, both the Royal Bank of Scotland and the Bank of Scotland has been coy about its plans for the NatWest branches, leading the unions to fear that big cuts are planned.
As the Bank of Scotland posted strong first half results, it provided little extra information about its planned bid.
The Bank of Scotland posted a 12% increase in first-half profits to £471m, at the top of analyst expectations.
The bank said of its bid for NatWest, that the combination could be achieved "without large-scale compulsory redundancies".
Chief Executive Peter Burt has previously said he did not envisage "tens of thousands" of job losses.
Given that staff costs are a high part of any bank and the part of the merger motivation will be to cut costs, some job losses seem inevitable.
Bank of Scotland pointed to its strong results as further proof the NatWest bid could work.
"Further encouragement for this exciting proposal is provided by our good interim results, which show that our clear focus has produced further growth in assets, productivity and profits," chairman John Shaw said.
Legal & General talks
Bank of Scotland made its opportunistic bid for NatWest after the latter's £10.75bn bid for life assurer Legal & General was badly received by the markets.
Bank of Scotland Chief Executive Peter Burt has revealed that they too explored a tie-up with Legal & General several months ago. They had come to the conclusion that merging banks and insurers wouldn't work.
Mr Burt declined to comment on whether their bid for NatWest would be raised.
Bank of Scotland is now under pressure to raise its £20.8bn bid to see off rivals.
The bank reported annualised growth in lending since February was 22% with its UK market share rising to 6.9%.
The Company File Contents