Magazine article American Banker

Natwest Plans Big Back-Office Exodus from the N.Y.C. Area to Pennsylvania

Magazine article American Banker

Natwest Plans Big Back-Office Exodus from the N.Y.C. Area to Pennsylvania

Article excerpt

National Westminster Bancorp will relocate 1,300 back-office jobs - 15% of the company's employees - from the New York City area to Pennsylvania over the next two years, a move that will dramatically lower personnel costs.

The banking company will save $17 million a year starting in 1995, due primarily to lower labor and real estate costs in Pennsylvania.

The company obtained $22 million in financial incentives from the state.

Natwest will take a $25 million restructuring charge in the first quarter related to the move.

The $24 billion-asset company, based in Jersey City, is the U.S. subsidiary of London-based National Westminster Bank PLC.

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The bank also announced plans to outsource its consumer loan operations to Electronic Data Systems Corp., Plano, Tex. As a result, Natwest will shed an 275 additional positions.

According to John Tugwell, chairman and chief executive officer, Natwest needs to lower expenses "to survive and compete successfully against financial institutions that operate from a lower-cost base."

"To grow our businesses and remain healthy we must continually focus on controlling costs" he said.

Natwest will move credit card processing and collections and customer service to Scranton, Pa., 130 miles from New York City.

Those operations are currently housed in Natwest offices in three metro New York locations - Melville, downtown Manhattan, and Bridgewater, N.J.

Bank officials said that the 1,. …

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