To expand its existing operations beyond New York and New Jersey, London-based National Westminster Bank PLC, plans to start up a bank in Delaware.

Natwest gave public testimony in Wilmington Monday on its application to the Office of the Delaware Bank Commissioner for a charter in that state.

The bank, to be called Natwest Bank Delaware, will be Natwest's third bank in the United States. The others are National Westminster Bank USA, based in New York City, and National Westminster Bank N J, based in Jersey City.

The Delaware bank is expected to offer the full range of Natwest's consumer lending products, including credit cards, installment loans, student loans, and home equity loans.

Natwest executives hope to start operations in Delaware by early 1995 with about $2.4 billion in assets. The bank will be capitalized at $197 million from day one, "well above" the minimum required by Delaware law, Stephen Tallon, executive vice president and treasurer at Natwest USA, said in a statement.

Favorable Tax Treatment Besides bringing the bank more customers, operating in Delaware means favorable tax treatment because its tax laws are more positive for banks than those in New Jersey and New York.

"By opening a national consumer lending business in Delaware, Natwest can operate within a regulatory climate that enables it to offer a variety of products at a reasonable cost," Mr. Tallon said.

Reuters news service reported that Delaware banks pay 8.7% on the first $20 million of taxable income. That rate decreases incrementally to a fixed rate of 2.7% on taxable income above $30 million.

Andrew Haste, a senior vice president in charge of Natwest's $740 million consumer loan business, is the proposed chief executive and president of the Delaware bank.

Natwest should have an answer from the Delaware bank commissioner's office on its application in about 11 days.

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