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Friday, 8 October, 1999, 16:33 GMT
NatWest chief executive ousted

Derek Wanless Derek Wanless has been the target of Bank of Scotland's fire

The chief executive of NatWest Bank Group, Derek Wanless, has been ousted.

Battle for Natwest
His departure from the front line role is part of a shake-up at the company in response to the hostile 21bn takeover bid from Bank of Scotland.

NatWest said Mr Wanless would remain with the group as a consultant to help "see off the ill thought out bid by Bank of Scotland".

But he is likely to receive a pay-off of one year's pay and benefits - which in 1998 totalled more than 800,000. He also held shares and share options worth more than 3m at the end of 1998.

The career banker will be succeeded temporarily by group chairman Sir David Rowland, with Ron Sandler brought in as a director and chief operating officer on a basic salary of 450,000.

The two are reunited from their earlier successful stint in similar roles at Lloyd's of London. The bank hopes Mr Sandler will play the key role in its defence strategy.

Forced out by non-execs

Following the announcement, NatWest said it was considering all defence options, including asset sales to fight off Bank of Scotland's hostile bid.

A major element of Bank of Scotland's argument has been what it described as the poor management record at NatWest.

Mr Wanless, who has spent the majority of his career at NatWest, has been criticised by investors for taking it into areas like investment banking, while failing to address the bank's high costs.

He steps down less than 48 hours after NatWest abandoned its attempts to take over insurance group Legal & General for 10.75bn.

Mr Wanless was forced out by the bank's non-executive directors, who decided that he should be replaced, said Sir David.

"There is a moment when you know it's time to go and let someone else have a go," he said.

Analysts' early reactions to news of the appointments were muted. Simon Willis, from Charterhouse said: "This is unlikely to make any difference ultimately to NatWest's future."

The move seemed "unfair, as it was Rowland who wanted the Legal & General deal and he now becomes chief executive as well", one insurance analyst said.

Chief financial officer Richard Delbridge, NatWest veteran Bernard Horn and Paul Myners, a founder of the Gartmore fund management business, complete the team.

Cost cutting

Sir David said after the announcement: "Our task now in these circumstances is to show to ourselves and to all of you just what is possible out of NatWest, and then use that as a measure to decide whether or not any other association is better for the shareholders."

NatWest was waiting for Bank of Scotland's formal offer before elaborating further on what its defence would be, he said. The formal offer is expected next week.

"We've got the best business bank in Britain and a smashing personal franchise," he said.

The shake up comes a day after Bank of Scotland said it aimed to cut costs by 1bn-a-year after its merger with NatWest.

BoS said it planned to stick to NatWest's 1996 plan to cut 10,000 staff; so far, only about 1,000 jobs have been lost.

Chief executive Peter Burt also described NatWest as a "relatively inefficient operation".

"We'd expect there to be more substantial cost savings than with a conventional bank merger, " he said.

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