Bank of Scotland launches new assault on NatWest

THE BANK of Scotland yesterday changed tack in its pounds 26bn bid for NatWest, claiming it was better equipped to grow the clearing bank's business than NatWest's management or the Royal Bank of Scotland.

Presenting a detailed rebuttal of NatWest's claims that its bid was "risky, ill thought-out" and would lead customers to desert en masse, BoS said it had spent four years studying NatWest and was convinced it could boost revenues at NatWest by at least 5 per cent a year. Gavin Masterton, the BoS chief operating officer, said there were significant gaps in the NatWest branch network in England and Wales and NatWest had failed to develop its business on a national scale.

"This is one of the key opportunities for growth under Bank of Scotland ownership. Bank of Scotland intends to be net branch opener not a branch closer," he said. Yesterday's shift suggests the bank has been stung by claims it has adopted a slash and burn approach in contrast to the RBOS which appears to have been more successful in convincing the NatWest board it has a better recipe for turning NatWest around.

But yesterday's detailed presentation was quickly dismissed by NatWest as a u-turn. Sir David Rowland said: "Its (BoS) inflated claims and the associated risks mean NatWest's shareholders should give Bank of Scotland's proposals a wide berth."

Mr Masterton, selected to oversee BoS's integration plans, said: "Bank of Scotland believes that its success is due in a large part to its entrepreneurial, `can do' and professional culture of its staff."

He insisted plans to sell NatWest's non-core business and slash the cost base by pounds 1.015bn were the first stage in an effort to reposition a bank which he maintained had been steadily losing market share.