RBS reveals plans for ringfencing restructure

The overhaul is also set to confine its RBS retail brand to Scotland.

In a move that aims to pre-empt new UK “ringfencing” regulation designed to protect taxpayers, the still 73 per cent-state owned, bailed-out lender said NatWest would become its main customer-facing brand in England, Wales and western Europe, while its Royal Bank of Scotland name, which dates back to 1727, will be used only in Scotland.

Under the new regulations, which come into force in 2019, lenders with more than £25 billion of deposits must separate their high street retail business from riskier investment banking activities.

In practical terms, RBS’s new structure will mean the creation of a holding company — to be called NatWest Holdings — for the ringfenced banks.

Coming online at the start of next year, it will encompass RBS’ personal, private, business and commercial customers, and the NatWest, Coutts and two Ulster bank divisions.

Three divisions will sit outside of the ringfence, including the investment bank, which will be renamed NatWest Markets, as well as its Jersey and Isle of Man bank.

The new ringfenced group and the non-ringfenced division will sit underneath Royal Bank of Scotland, which will remain the group holding company.

The plan will involve shifting personal, private, business and commercial customers across its legal entities, in mid-2018. The investment bank will be renamed at the same time.

“Our proposed future structure under the ring-fencing legislation and our brand strategy are key elements of the bank we are becoming,” Chief Executive Ross McEwan said in the statement.

He added: “The future ringfenced structure of the bank is not only designed to be in compliance with the new regulatory requirements and objectives but will better reflect who we are as a bank and what we stand for: a bank that is focused on its customers.”

But today’s announcement from RBS is also the latest attempt by the Edinburgh-based bank to rebuild its reputation among borrowers and taxpayers after it threatened to topple the UK financial system following years of reckless lending and a highly leveraged takeover spree on the eve of the financial crisis.