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SCMP Reporter

NatWest Markets (NWM), the investment banking arm of National Westminster Bank, has appointed Tom Lundie as chief financial officer for the group, it said yesterday.

 Mr Lundie, formerly head of finance at HSBC Holdings' group treasury and capital markets division, will report directly to NatWest group finance director Richard Delbridge, himself a former finance director at HSBC.

 The appointment comes as NatWest Bank, under chairman Lord Alexander, undertakes a review of its troubled investment banking arm after the discovery of a GBP90 million loss (about HK$1.17 billion) in its interest rate options book.

 Mr Lundie's appointment is viewed as a precursor to changes at NWM, although company officials yesterday insisted the move was unrelated to the review, which is not yet complete.

 Analysts expect NatWest to announce the review's findings next month, when interim results are published. There is already speculation that the group is considering moving NWM's corporate lending and treasury operations into NatWest Bank.

  NatWest has been striving to put NWM into the top 10 investment banks in the world since its formation in 1992.

 Several key names from other leading investment banks, particularly Morgan Stanley, have been hired to help it realise this goal.

 The review is expected to recommend a less ambitious approach, although the bank will almost certainly remain committed to developing certain key strategic areas, particularly in Asia.

 Bonnie Miao Bandene, managing director of global sales and trading of Asian equities, has just finished building a London-based Asian team.

  NWM has also hired Chris Rumsby, formerly head of Asian sales and trading at Flemings in London, where he worked for 16 years.

 The appointment is regarded as a coup for NWM, given the uncertainty swirling around the bank, and the investigation into the circumstances surrounding the options losses being conducted by Britain's Serious Fraud Office.

  After last year's buy-out of Hong Kong trading house Wheelock - a failed joint-venture partner - NWM wants to reassert its presence in Asia by boosting regional corporate finance, equities and derivatives services.

 Ms Bandene says she now aims to build strong relationships with clients, complemented by fundamental broking, strong research and trading expertise.

 At the group as a whole, any moves to take away NWM's corporate lending and treasury roles would follow the pattern at HSBC, where the treasury operations are already separate from investment banking.

 It would also make NatWest into a more marketable asset, if it was ever to be sold, as it would free the bank of the often complicated lending relationships it may have with some of its big corporate clients.

 The move would also drastically reduce NWM's profit, as returns from traditional investment banking are less profitable if treasury operations are left out.

 Analysts believe the changes at the bank will prove it is difficult for commercial banks to capitalise on their corporate lending relationships as a basis for building an investment bank.



Ex-HSBC finance chief to hold the purse strings at NatWest Markets