RBS Williams and Glyn sale to halt in favour of SME-funding plans

RBS Williams and Glyn sale to halt in favour of SME-funding plans

The bank, which received a £45bn bailout in 2008 by the government, was required to sell the Williams and Glyn business before 31 December 2017 to comply with the EU Commission’s conditions when granting the rescue package.

Clydesdale and Santander were both reportedly interested in buying the branch network, but in an update to the London Stock Exchange, RBS said none of the acquisition proposals it had received could deliver a full separation and divestment before the deadline.

Instead, the Treasury has come up with a separate plan to allow RBS to fulfil its commitments, by setting out a revised package of remedies to promote competition in the SME banking sector.

If the package is approved by the EU commissioner for competition policy, RBS will be required to offer:

Ross McEwan, chief executive of RBS, said: “Today’s proposal would provide a path to increased competition in the SME market place. If agreed it would deliver an outcome on our EC State Aid divestment obligations more quickly and with more certainty than undertaking a difficult and complex sale and would provide much needed certainty for customers and staff.”

The bank has made a provision of £750m, accounted for in its 2016 annual results, to deliver the package of remedies.

RBS said that subject to the plan being finalised by the European Commission and the Treasury, it would assess the timing and strategy of the reincorporation of Williams and Glyn into its group. It said this was likely to create some additional restructuring changes during 2017 and 2018.