Treasure of the big banks isn't all in the vaults

NatWest's art collection is going on show. But many gems are on rivals' office walls, writes Matthew Sweet

They were the NatWest's most secret asset, but now the retail bank's collection of 1,500 paintings is to go on permanent public display in the heart of the City of London. Works by Sir Joshua Reynolds, Bridget Riley and David Hockney will be taken down from boardroom walls and exhibited in NatWest's former headquarters opposite the Bank of England.

Yet behind closed doors on Lombard Street and Bishopsgate remain thousands of works by Old Masters and young contemporaries. Those banks willing to talk about what they have on their walls claim that spending on art is not just another form of investment: they want their Howard Hodgkins and Rachel Whitereads to raise the tone of their offices and keep the Pamela Anderson calendars at bay.

For many British retail and merchant banks, art acquisition is also an attractively expensive way to impress clients, and the recession of the early 1990s allowed them to snap up good work at bargain prices.

Merchant bank Robert Fleming - an enthusiastic buyer of modern art - favours recent Scottish painters and has more than 600 oils and water-colours.

The Midland Bank has a considerable hoard of 20th-century British art and the TSB owns a large number of historical and contemporary works, swelled by its 1987 amalgamation with Hill Samuel. The collection was expanded by TSB and Courtauld Institute chairman Sir Nicholas Goodison, who bought works by Elisabeth Frink, Glynn Williams and Carel Weight. However, after TSB's recent merger with Lloyds, the collection's future is "under discussion", and the bank is reluctant to talk about it.

Deutsche Morgan Grenfell may have been willing to lose Nicola Horlick, but the merchant bank is keen to hold on to its dazzling collection of contemporary British and German art. Its London offices are adorned with enough modern masterpieces to fill a good-sized public gallery: the doorman stands by a Howard Hodgkin, receptionists puzzle over whether the Baselitz has been hung the right way up, and, on the trading floor, stocks and shares are bought and sold under a huge, bronze-coloured work by British artist Shirazeh Houshiary.

In the past two years, the bank has doubled the size of its London collection to 1,230 works, with an estimated value of more than pounds 1.5m. The emphasis is firmly on the modern. The bank's art consultant, Alistair Hicks, is buying up the work of young - and relatively inexpensive - British contemporaries. He has his work cut out: the bank is constructing a new headquarters in the heart of the City and all of its walls have to be filled. He is also deeply involved in plans to commission a series of new works from leading British and German sculptors.

DMG's Manfred Zisselberger explains that the bank's art phil-osophy is to create a cultured, pleasant environment: "We don't see this as a form of investment," he said. Staff are allowed a certain amount of say in what gets hung in their workspace.

But what if a member of staff wanted a Damien Hirst pickled sheep installed by the coffee machine? "Well," says Mr Zisselberger, "we'd think about it, but we wouldn't necessarily go straight down to the shop and buy one."

Catherine Cuthbert, picture advisor to the Barclays group, also claims that her bank's acquisition of art is not merely an investment policy, but that Barclays buys art "for prestige, to cheer people up, and to make the offices more human".

She also contends that pictures are useful when navigating featureless modern buildings. Her bank's collection has an emphasis on modern British art - there is work by Maggi Hamb- ling, and her 98- year-old father Harry, a Barclays employee for 44 years.

Barclays' absorption of 20 smaller financial institutions also means that the oldest picture in its collection dates from the 1690s.

Although some banks have mounted their own temporary exhibitions and make occasional loans to galleries (Barclays recently allowed the Hayward Gallery to borrow its Howard Hodgkin), the NatWest is the first to open its entire collection to the public.

The bank has an annual budget for the purchase of contemporary work and has established its own pounds 36,000 art competition, won last year by the painter Sarah Raphael. Those in debt to NatWest will be glad to know that admission to the new gallery, at 41 Lothbury Street, will be free of charge.