- NATWEST GROUP
- 25 August 2026 12:33:38
Source: Sharecast
According to Bloomberg, which cited a person familiar with the matter, the US Federal Reserve granted the lender’s ring-fenced bank approval last week to set up a representative office in Connecticut. That will see it employ a small number of relationship and credit colleagues in the US.
It was understood that NatWest’s US-licensed broker-dealer already helps hedge funds and the new office will help bolster existing relationships.
The move comes after former Chancellor Rachel Reeves’ reforms in January 2025 allowed ring-fenced lenders to establish a physical presence in jurisdictions like the UK. The regime, which was introduced after the 2008 financial crisis, had banned banks from establishing branches or subsidiaries outside the European Economic Area to shield them from risky overseas operations.
The news was first reported by the Financial Times.
Broker Shore Capital, which has a ‘hold’ rating and 650p price target on NatWest, said that while modest in scope, the proposed expansion represents an early reversal of the strategy pursued by NatWest since the Global Financial Crisis, during which the group largely withdrew from international markets, including the US, to focus on its domestic franchise.
"At this stage, there is nothing to suggest the move signals a material change in capital allocation priorities or the group’s overall risk appetite," it said. "However, it does indicate a willingness by management to pursue growth opportunities outside the UK and, by extension, accept a degree of additional execution and strategic risk.
"Whether this proves to be a sensible extension of the bank’s existing client offering or the first step towards a broader international expansion remains to be seen. For now, we view the development as incremental rather than transformational.
"Nevertheless, investors should monitor such initiatives closely given the banking sector’s history of overseas expansion destroying shareholder value, including at NatWest’s predecessor, RBS, where ill-judged international growth ultimately contributed to significant value destruction."