Natwest wins approval to beef up US presence
Natwest has landed approval from the US Federal Reserve to beef up its presence on the other side of the Atlantic.
The British banking giant has been granted permission to set up a “representative office” in Connecticut that will “act as a liaison with current and prospective US customers of the bank”.
The approval document from the Fed says the Natwest office would “promote and market the bank’s products and services, conduct customer service activities, and perform back-office functions”.
Under US regulations, a representative office is allowed to engage in “representational and administrative functions in connection with the banking activities of a foreign bank, including soliciting new business for the foreign bank”. It is not permitted to contract for any deposit, lend money or engage in any other banking activity.
Still, the presence will mark a step up from the current tranche of products the bank can offer via its broker-dealer arrangement that can execute trades for institutional clients.
Natwest eyes boosted engagement in US
The bank currently operates in the US through non-banking, which restricts it from standard commercial banking operations on US soil.
A source close to the bank said the new office would create an opportunity to strengthen the group’s operating model through on-the-ground relationship management, credit support, and market engagement. They added the January 2025 ring-fencing reforms under Rachel Reeves had helped to establish a physical presence outside the European Economic Area.
Natwest originally entered the US market as RBS in 1988 after it snapped up Citizens Financial Group. It was forced to offload significant swathes of its international presence following the financial crisis with the exit from Citizens confirmed in 2015.
Several European finance institutions have made a bid to crack the US market in the last year, hoping to seize on a deregulatory agenda brought forward by President Donald Trump.
Revolut said it would apply for a US banking permit in March. But some fintech firms have watched their American dreams go off the tracks after Wise and Bunq were both rejected in their licence bid.
Meanwhile, Monzo withdrew its application for a US banking permit in October 2021 and this year confirmed it had stopped operations in the region.