Alison Rose, Natwest CEO

The bank formerly known as Royal Bank of Scotland, majoratively-owned by taxpayers, is expected to tell staff this week that at least three of its most senior investment bankers will leave the bank.

It is reported that Scott Satriano, head of financial and risk solutions, Kieran Higgins, head of trading and flow sales and Oliver Cooke, chief digital officer will be leaving Natwest Markets.

The three represent a fifth of the bank’s management team.

Alison Rose, who became the bank’s chief executive in November, is shrinking the investment bank, further distancing NatWest from its “casino” days under disgraced former boss Fred “the Shred” Goodwin, who briefly made it the biggest global bank by assets in 2008.

Under Rose’s leadership, NatWest is now focusing on retail and commercial banking, The Times reports. 

In February, Ms Rose set out a plan to cut the investment bank’s assets in half, shedding some clients but continuing to serve its business customers.

However, bankers have warned that the plan risks cutting the bank’s income more than costs. One said NatWest’s corporate customers accounted for only about a quarter of revenue in the fixed-income business, while more lucrative clients were being ditched to free up capital.

Another banker said: “They are massively scaling back the rates business and other parts of the financial institutions business…it’s going to cost a fair bit.”

Analysts have also pointed to bad timing, as investment banking has benefited from volatile markets since the outbreak of the coronavirus pandemic. In the first half of this year, NatWest Markets’ income increased by 44% compared to a year ago. Natwest’s income dropped by 9% as it was forced to set aside £2.8bn to cover bad COVID-19 loans, pushing it to a £770m loss.

Analysts believe Ms Rose will have to go further to reduce costs, especially in the retail bank. She was presented with a radical plan last month to cut £3bn from NatWest’s cost base of about £7bn over the next five years, raising concerns over potential branch closures and job losses.

NatWest said: “In line with the multi-year transformation announced in February, we continue to progress our plan to refocus NatWest Markets on activities which directly support core customers. Our staff will always be the first to be informed in the event of any job cuts.”