John Tugwell

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 U.S. unit of National Westminster plc, hasn't backed off from the challenges of leading a "foreign" bank in the rapidly changing American market.

His work was cut out for him when he was sent over from NatWest's London headquarters in 1991 to whip the U.S. operation into shape. Mired in recession and real estate loans gone sour, it had racked up $353 million in losses the previous year. Now, after three years of cost cutting, write-offs, and new management, the picture has changed dramatically. From his offices in a gleaming Jersey City skyscraper, Tugwell oversees a regional bank that covers New York and its stronghold, New Jersey, where it has 221 of its 348 branches. It has assets of $30 billion and posted a record net income of $298.6 million for 1994, nearly double that of two years earlier.

Most surprisingly, Tugwell has engineered this turnaround by carving out a solid base in U.S. consumer banking, a notoriously competitive arena that has proved disastrous for other British banks. Barclay's, NatWest's arch-rival at home, bailed out of its American retail business after it, too, suffered heavy losses in the early '90s.

A cornerstone of Tugwell's winning strategy has been running the bank's branches like franchises. NatWest branch managers 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,...