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  • Writer's picturePeter Smith

TUESDAY 26th OCTOBER - Rubbishing Bank of Scotland

I'm in my office in King's Cross when Bernard Horn rings, around mid-afternoon. He is straight to the point. "The defence document is coming out tomorrow."

I'm disappointed as I expected him to do a password first - "The Owl flies to the Urals when the Scotsman tosses his caber," you know, that sort of thing. But I am pleased he has told me, so I can plan my trip to Cheadle.

He also tells me to get over to Lothbury for a meeting of the top team (functional heads, MD's, a few others like Mark Fisher) in the Boardroom at six. First, I call Cheadle and tell the guy in charge I will be up in the morning, and that tomorrow is the big day for the announcement to staff of the closure.

When I get to the Boardroom, everybody who is anybody is there, including Achi Racov, who I thought had gone already. Achi is the Chief Information Officer (I think) and is an eccentric, brilliant, occasionally maddening character who has a host of business interests outside NatWest. (NatWest bought one of his firms, I believe).

He is seen as one of the leading IT gurus in the world in certain areas, but somehow NatWest has never quite found a way of capturing his ability. No-one seems capable of"managing" him in a conventional way so the company might get his talent directed at the key business issues. The alternative approach would be to give his entrepreneurial and creative genius lots of space and be prepared to back his ideas; NatWest has not done that either. As a result, I think he has been frustrated for most of his time here, and the company has not captured the value I 'm sure he could have brought.

The meeting opens, and Sir David tells us about the defence document- chiefly an attack on Bank of Scotland and the credibility of their plans. We are calling into question the basis for their savings estimates, particularly in areas like IT and Property. We will also announce our own plans to dispose of Gartmore, Ulster Bank, Greenwich NatWest and NW Equity Partners.

But we will be somewhat keeping our powder dry for later in the process; we need to manage carefully the flow of information to the market over the next weeks. In addition, there will be a separate announcement about job cuts in Head Office and Corporate Banking. The total for GHQ is around 1000, with about 600 in Corporate; although it sounds a lot it seems to me this is not as drastic as it might have been. The Corporate figure includes reductions in IT contractors, changes already planned and so on.

2019 notes: Very sadly, Achi Racov died after a short illness in 2002, aged just 57. You can read more about him and his legacy here.

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