KPMG audit contract threatened by Royal Bank of Scotland takeover

Months of wrangling between hostile bidders RBS and Bank of Scotland ended dramatically last week when RBS chief executive Sir George Mathewson secured the backing of NatWest’s financial advisors, creating the UK’s third largest bank.

But with, RBS is audited by PricewaterhouseCoopers, Nat West auditor KPMG could lose out.

An RBS spokesman, however, said the retail arms of both banks would be kept separate under the deal to allow for the survival of both brands so KPMG could be retained for some advisory work.

While the fate of the auditors remains in the balance, it is understood that NatWest chief financial officer Richard Delbridge, a member of the Financial Reporting Review Panel, will keep his job under the new arrangement.

It is unclear what will happen to other key staff as only NatWest chairman David Rowland and chief executive Ron Sander have confirmed that they do not want to remain in the enlarged company.

The takeover will be good news for small business customers and RBS has stated its commitment to improving its service to this key group.

NatWest has 25% of the small business market share and the largest number of small business accounts in the high street. It also announced a boost to small business lending by £1bn at the end of the January.

RBS, meanwhile, has often been voted best in the market for service.

‘At the moment we do not complete with NatWest for volume but we are rated as best in terms of service for small business,’ said an RBS insider.

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