ROYAL BANK OF SCOTLAND AUDIT – D&T moves in as PwC resigns.

Deloitte & Touche is to take over as auditor of the merged Royal Bank of Scotland and NatWest group this week after the bank dropped existing auditors PricewaterhouseCoopers and KPMG. PwC – which audits RBS – banks with NatWest. RBS accepted PwC’s offer to resign after reviewing a feasibility study from the firm that set out how it could make arrangements that would preserve its independence. The firm audits Lloyds TSB and Barclays Bank, and had it retained the contract – worth #2.4m in audit fees last year and #9.4m in consultancy and other fees – PwC would have audited three of the UK’s largest clearing banks. The merger also presented a problem for the RBS. If it had retained PwC as auditor and the firm had been forced to bank elsewhere, it would have lost one of its major corporate clients. KPMG stands to lose up to #25m which it earns each year in audit and advisory fees from NatWest. The firm also audits HSBC and Halifax. RBS is understood to have chosen Deloittes because it did not present conflict of interest problems. In a further shake-up NatWest chief financial officer Richard Delbridge, 57, resigned ‘by mutual agreement’. RBS said his age would ‘preclude him from providing long term leadership in the enlarged group’. He will leave in April, although Grahame Whitehead – finance and risk director of RBS’s UK bank division – has been appointed chief financial officer for the combined group with immediate effect.

Related reading

aidan-brennan kpmg