| The Royal Bank of Scotland said on Friday that it would rename its investment bank as the lender outlined plans to comply with new rules intended to protect British retail banking businesses in a financial crisis. Banks in Britain are required to wall off their retail banking operations by 2019, a practice known as ring-fencing. The rules are intended to shield the retail business from the impact of investment banking and other activities in the event of another global financial meltdown. |  |
R.B.S., which is 73 percent owned by the British government after a bailout during the last financial crisis, said on Friday that it would transfer a majority of its British and Western European banking businesses to a ring-fenced entity by the end of 2018.
The investment bank would be renamed NatWest Markets at the same time and would be outside the ring-fenced bank.
“Our proposed future structure under the ring-fencing legislation and our brand strategy are key elements of the bank we are becoming,” Ross McEwan, the R.B.S. chief executive, said in a news release.
R.B.S. said that NatWest would serve as the main brand for its retail banking operations in England, Wales and Western Europe, and that the Royal Bank of Scotland would be its core brand in Scotland. It would continue to operate under the Ulster Bank brand in Northern Ireland and Ireland.
Ring-fencing has been one of the main issues Mr. McEwan has had to juggle as he seeks to turn around the lender’s fortunes.
Last year, R.B.S. announced plans to dismantle its global investment bank and to reduce the number of countries in which it operates. The bank says it wants to focus primarily on retail and on corporate banking in Britain and Ireland.
The bank is also seeking to sell its Williams & Glyn branch network. European regulators have ordered R.B.S. to spin off the network by the end of 2017 as a condition of its bailout. R.B.S. warned this year that there was “significant risk” it might not meet that deadline.
Re-disseminated by The Dragon Banker from The New York Times
The investment bank would be renamed NatWest Markets at the same time and would be outside the ring-fenced bank.
“Our proposed future structure under the ring-fencing legislation and our brand strategy are key elements of the bank we are becoming,” Ross McEwan, the R.B.S. chief executive, said in a news release.
R.B.S. said that NatWest would serve as the main brand for its retail banking operations in England, Wales and Western Europe, and that the Royal Bank of Scotland would be its core brand in Scotland. It would continue to operate under the Ulster Bank brand in Northern Ireland and Ireland.
Ring-fencing has been one of the main issues Mr. McEwan has had to juggle as he seeks to turn around the lender’s fortunes.
Last year, R.B.S. announced plans to dismantle its global investment bank and to reduce the number of countries in which it operates. The bank says it wants to focus primarily on retail and on corporate banking in Britain and Ireland.
The bank is also seeking to sell its Williams & Glyn branch network. European regulators have ordered R.B.S. to spin off the network by the end of 2017 as a condition of its bailout. R.B.S. warned this year that there was “significant risk” it might not meet that deadline.
Re-disseminated by The Dragon Banker from The New York Times
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