How it started
The Royal Bank of Scotland Group
By the late 1960s, economic conditions were becoming more difficult for the banking sector. In response, the National Commercial Bank of Scotland merged with the Royal Bank of Scotland. The merger resulted in a new holding company, the National and Commercial Banking Group being founded in 1968, with the merger formalised in 1969. The holding company was renamed The Royal Bank of Scotland Group in 1979 and became a public company in 1982.
The late 1990s saw a new wave of consolidation in the financial services sector. In 1999, the Bank of Scotland launched a hostile takeover bid for English rival National Westminster Bank. The Bank of Scotland intended to fund the deal by selling off many of NatWest's subsidiary companies, including Ulster Bank and Coutts. However, the Royal Bank of Scotland subsequently tabled a counter-offer, sparking off the largest hostile takeover battle in UK corporate history. A key differentiation from the Bank of Scotland's bid was the Royal Bank of Scotland's plan to retain all of NatWest's subsidiaries. Although NatWest, one of the "Big Four" English clearing banks, was significantly larger than either Scottish bank, it had a recent history of poor financial performance and plans to merge with insurance company Legal & General were not well received, prompting a 26% fall in share price.
On 11 February 2000, The Royal Bank of Scotland was declared the winner in the takeover battle, becoming the second largest banking group in the UK after HSBC Holdings. NatWest as a distinct banking brand was retained, although many back-office functions of the bank were merged with the Royal Bank's, leading to over 18,000 job losses throughout the UK.
Integration of NatWest with Royal Bank of Scotland
The IT integration project was costed at £1.5 billion per year for a project of 3 years duration with an expected return on investment of 1.5 billion per year at conclusion. By completion the project employed up to 10,000 contract staff in addition to internal resources. A significant difference between this and other traditional IT integration projects was the choice to use what was described as 'the Wachovia Strategy', whereby the assets of the acquired bank were not to be integrated with the acquiring bank, but rather the data representing the IT assets was to be extracted, transformed and loaded (ETL) into the RBS IT systems.
From Wikipedia’s article on NatWest Group, shared under CC BY-SA 4.0.3