David Prosser: Where are the new banks?

Outlook: The whole idea was to promote new competition in a market that is sorely lacking in exactly that

It increasingly looks as if Williams & Glyn, the 320-branch network that Royal Bank of Scotland is selling off as part of its settlement with the EC competition regulator, will be acquired by Santander. The Spanish bank may be the only bidder with deep enough pockets to meet the £1bn asking price, particularly as it is dependent on £3bn of Bank of England funding support that the acquirer would need to replace while also meeting capital adequacy requirements.

Such an outcome would be disappointing. Santander is a well-run bank that has already done an excellent job of integrating several British banking names, including Abbey and Alliance & Leicester, and would no doubt be just as successful with Williams & Glyn. But the UK government promised that the break-up of RBS would see new entrants to Britain's banking sector and Santander is very much not one of those.

The whole idea was to promote new competition in a market that is sorely lacking in exactly that. We're beginning to see the first inklings of change – witness the launch of Metro Bank last week – but Williams & Glyn would give a new entrant some clout, rather than having to build a business from scratch.