BBC News | BUSINESS | NatWest merger's mixed fortunes

As the dust starts to settle on the Royal Bank of Scotland's successful bid for NatWest, interested parties will be working out exactly what it means for them. From staff and customers to other banks, BBC News Online assesses who's in the black and who's in the red.

WINNERS

Customers:
People with NatWest accounts have not always had a happy time recently.

Poor service, inefficient staff and complex overdraft procedures have been among their complaints.

While there is no windfall payment from the take-over, they can expect to see a difference.

RBS says it plans to keep the NatWest name and all its branches, but it promises dramatic improvements in service.

Focus on service

In Scotland, the bank underwent a comprehensive review in the 1990s to understand exactly what customers want and how to give it to them.

Within NatWest, this could mean back office staff being taken out of the branches so that those people left can concentrate solely on service.

There could well be retraining so they are more willing and better equipped to deal with customers' questions and problems.

All this might not make loans any cheaper, but RBS believes it can bring change for the better.

A recent survey showed that 60% of its customers were happy with their bank, compared with 46% at NatWest.

Shareholders:

A key part of the deal was whether the Royal Bank of Scotland or its rival, the Bank of Scotland, was offering the best terms for shareholders.

On the table for NatWest shareholders is an offer of 0.968 new RBS shares and �4 in cash for each share held.

RBS shareholders will be particularly glad the five-month take-over battle has ended.

Decline in sector

Before the bank launched its bid, its shares stood at �13.28. On Friday they were worth 844p.

That is partly because of fears about the merger but also because of a general decline in the sector.

However, that should soon change. "Investors in bank shares should sit tight now," advises Martin Evans of Sutherlands Stockbrokers.

"I think we are through the worst. Yields are attractive, the ratings are low and the health of the banks is quite strong, in line with the UK economy.

"We do expect to see the professional investors return into the banking sector, particularly once they've rebalanced their portfolios into telecoms and the IT sector."

Edinburgh:

The new group said on Friday that it would be building a new headquarters in the centre of the city, on land it already owns.

That will obviously be a boost for the local construction industry and associated business.

But Justin Urquhart Stewart of Barclays Stockbrokers urges caution.

"There's the initial pride among Scots that there is a Scottish clearing bank able to take on and now probably own an English clearing bank, but this does not mean that the whole function of NatWest will all move to Edinburgh," he says.

"In fact it could even mean that certain functions move down to London, so it's by no means certain that this is all good news for employment throughout Scotland.

"This is a commercial bank that operates not just in Scotland, not just in England but throughout Europe as well. It will find itself operating in the most cost-effective place."

Businesses:

A bigger bank, with a goal of becoming more efficient, can prove a boon to business.

Richard Irwin, chief executive of all-hotels.com and an RBS customer, is excited by the merger.

"We are their first ever dot.com investment," he says.

"We are very impressed by the top management in the Royal Bank - they are very forward-looking, they have a lot of faith in e-commerce, so the stronger they are, the better global position they have, the more strength we get from them."

Smaller companies:

Bank of Scotland shocked the industry when it first made its bid for NatWest, as it was much smaller than its prey. RBS is not that much bigger.

In an industry which, like many others, is undergoing a period of consolidation the move showed that anything could be possible.

"The surprise was that the original launch of the torpedo came from the Bank of Scotland," believes Justin Urquhart Stewart.

"That someone like them could start it showed a real David and Goliath attitude. That was really the surprising element of this."

LOSERS

Staff:

While RBS says it will keep NatWest branches open, it has pledged to cut costs by more than �1bn. That could threaten the jobs of 18,000 NatWest employees.

"We have known right from the outset that whatever outcome there was, there was going to be a substantial number of job losses at the end of the process and obviously we are very concerned about that," said Rob O'Neill of the Unifi banking union.

That sort of downsizing reflects the changes that have taken place in the industry in recent years.

It is estimated that the shift from branch-based business to internet and telephone accounts has cost 200,000 jobs - and changed the nature of bank work.

"For those looking to get into the traditional banking environment of small branches, interface with customers and a small number of staff, they are probably going to be disappointed," says banking consultant Chris Roebuck.

"For those that are potentially looking to go into e-commerce, telephone services and related areas, they are going to be in an expanding industry."

Bank of Scotland

Its bid for NatWest was audacious. Now it has failed, where does that leave this unlikely predator?

As it became clear it was losing the take-over battle, the bank's shares rose amid speculation that it would become a target itself.

"I'd be very surprised if there was a bid for Bank of Scotland," says analyst Bryan Johnston of Bell Lawrie White.

"It has a very distinguished management and has a very good record. What I think they will try to do now is look for some friendly alliance in the banking industry and the financial world as a whole."

Links to other Business stories are at the foot of the page.