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NatWest thinks small

May 1999

NatWest is to step up its community banking commitment by offering credit unions redundant high street branches as premises.

Discussions are already underway with a credit union in Salford, and the bank is also working on a pilot project in Birmingham with 29 credit unions that may be able to use NatWest technology to pool their ‘back room’ services.

‘We want them to retain their local links, but we can help them take advantage of economies of scale,’ said Andrew Robinson, head of NatWest’s community enterprise unit. ‘We could provide the back office and they could carry on doing what they are doing. If we have redundant space we can do deals to get them into the high street with premises.’

The new move will build on the launch of NatWest’s new three-year community bond, marketed as the first such investment vehicle offered by a leading high street bank.

The bond, which took a year to develop and was launched in March, was developed after extensive market research of 2,000 NatWest customers showed that 25 per cent were in favour of the idea.

Investors will be able to place anything from £500 to £250,000 in one of 11 regional bonds based on the boundaries of the government’s regional development agencies.

Interest rates on money invested will be lower than the market rate, with the difference between the two used by a charitable fund to support community investment in deprived areas.

Robinson said his unit will investigate the idea of using some of the money to support childcare businesses in deprived areas. NatWest is also putting money into a women’s enterprise and training unit in Norwich.

Robinson said the bank’s community unit, set up two years ago, is interested in micro credit schemes because of their potential business benefits.

‘One of the things we learned from our work with the ethnic minority market was that by being seen to be interested in people’s concerns you get an uplift in their business,’ he said. ‘Maybe the same will happen in this area.’

Robinson said 15 to 20 per cent of the population in his home country of Canada hold accounts with credit unions, compared with less than one per cent in the UK.




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