NatWest has sold its troubled investment bank, NatWest Markets, and other equity dealing subsidiaries to concentrate on high street banking and business loans.

Its total pre-tax profits after exceptional items rose to a record of œ2.142 billion from œ975 million in 1997.

NatWest chairman Lord Alexander said in a statement that the robust results were achieved "despite the considerable difficulties in the world's financial markets."

He added: "These results were achieved by a combination of tight management and concentration on those areas of our business where we have proven skills and a strong and loyal customer base."

Like competitors such asBarclays bank, NatWest has dropped its former ambition to offer global investment banking services and has instead concentrated on its home market.

Alexander said, "There is already some slowdown in economic activity" here, but insisted that the bank was well placed to survive economic stagnation, having paired back its loans.

The bank has already cut back on loans to emerging markets. It suffered a charge of œ80 million for emerging market exposure last year and has now set aside an additional $86 million to cover losses in Asia and Russia.

The management promised to pursue the bank's policy of buying back stock on the London market. Last year, NatWest purchased œ375 million worth of stock, helping to increase earnings per share almost three-fold to 91.2 pence.NatWest has been ruthless in its cost-cutting drive first outlined in mid-1996.The programme foresaw a reduction of 10,000 jobs by 2001 and a sharp reduction in B ranch outlets.

The bank was charged œ100 million pounds in 1998 for mis-sellingpensions to clients.

The board recommended a rise of 11.8 per cent in dividend payments to 36 pence per share.