John Tugwell decided to give up his Harley-Davidson motorcycle two years ago after a nasty run-in with a pothole. But the president, CEO, and chairman of NatWest Bancorp, the
His work was cut out for him when he was sent over from NatWest’s
Most surprisingly, Tugwell has engineered this turnaround by carving out a solid base in
A cornerstone of Tugwell’s winning strategy has been running the bank’s branches like franchises. NatWest branch managers act more as retailers than bankers, catering to the needs of local customers with everything from Saturday hours to special loan sales. All branch employees receive bonuses if they exceed their profit goals-but they’re on notice that they had better not slack on service, a priority for gaining market share in Tugwell’s view. “If I get a service complaint, no matter what contribution you’ve achieved above your target, you’ll suffer financially,” he states flatly.
Also part of what Tugwell calls the bank’s “armory of delivery systems” is a network of shiny, red automatic teller machines, expected to number 1,000 by the end of 1995, and telephone customer service, which currently fields about 1.3 million calls a month. An array of pilot projects that deliver product directly to the customer are underway, including “mortgage vans” stationed outside realtors’ offices and banking via interactive television.
The objective, Tugwell says, is to win more sales per customer. “We’re currently selling just three products to each one. The target is five.” Right now, the bank is aggressively pushing higher-margin products such as residential mortgages and home equity loans; Tugwell is waiting for regulatory changes that will permit banks to sell insurance products as well.
The bank’s retail business has received another boost with the acquisitions of two
On another front, Tugwell is taking a major step forward in his cost-cutting battle with a new $31 million service center in
But retail banking isn’t the only item on NatWest’s ambitious
Tugwell hopes to gain an edge by homing in on specific industries. The bank already has a strong position in the media industry, and recently, it teamed up with NatWest Markets, its existing investment banking arm in
“Without those relationships, and coming into a mature market, how would you persuade people who do business with a NationsBank-which also has an ability to underwrite with the falling away of GlassSteagall-that they should come to a foreign bank that hasn’t been here long?” Tugwell asks.
Unpretentious and hard-driving, Tugwell is a new breed of executive in British banking, once a bastion of the “old Etonian” network. He studied banking on a scholarship from predecessor