Natwest wins US Federal Reserve approval for new representative office

Natwest has secured approval from the US Federal Reserve to establish a representative office in Connecticut, signaling an expansion of its presence in the United States. The British banking group's new office will function as a liaison, promoting and marketing its products and services, conducting customer service activities, and performing back-office functions. This move represents a step up from its current operations, which are limited by a broker-dealer arrangement that restricts it from standard commercial banking activities on US soil.

The approval document from the Federal Reserve specifies that the representative office is permitted to engage in representational and administrative functions, including soliciting new business. However, it is explicitly not allowed to contract for deposits, lend money, or conduct any other banking activities. This strategic expansion aims to strengthen the group's operating model through on-the-ground relationship management, credit support, and market engagement.

Natwest's history in the US dates back to 1988 when it entered the market as RBS following the acquisition of Citizens Financial Group. The bank was compelled to divest significant international assets after the financial crisis, with its exit from Citizens finalized in 2015. The current expansion comes amid a trend of European financial institutions seeking to establish a foothold in the US market, partly driven by a perceived deregulatory agenda. Several fintech firms, including Revolut, have pursued US banking permits, though others like Wise, Bunq, and Monzo have faced rejections or withdrawn their applications.