ENGLISH COUNTY, AMERICAN ACCENT
The need to expand fast, embrace new markets, bring in fresh teams and revitalize the organization has catapulted once-staid County Bank into the brash world of American-style business practices.
As this UK domestic merchant bank tries to become a leading international securities house under its new name, it is copying not only the business profile of a US investment bank--more brokerage, less lending--but also the manner. It's becoming a harsher, more frenetic place to work, where the bright and ambitious rise fast, and others get pushed aside.
NatWest is building its new investment bank on solid foundations. "County has been the best of the clearing banks' merchant banks, even if its return on equity has been behind that of the most successful independent merchant banks,' said the chairman of one such bank. "Of the clearer merchant banks, it has the best corporate finance client base, its Eurobond performance has not been bad, and its investment management has grown quite well.'
But to build an international investment bank which can compete with Salomon and Nomura--as is NatWest's ambition--is expensive. County's current return on equity of about 20% is likely to shrink in the coming years, for the areas the bank is expanding into--the London stock market and the Eurobond market--offer meagre prospects of profit.