Church takes 10% stake in RBS division to create an ‘ethical’ bank
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Saturday 28 September 2013
A Church of England-backed consortium last night pledged the launch of a new “ethical” bank as they sealed a deal to buy up to half of Williams & Glyn’s from Royal Bank of Scotland.
The £600m which the private equity-led consortium - put together by Corsair Capital and Centrebridge - is paying to buy in is also being partly financed by RBS to the tune of £270m. As part of the deal the Church Commissioners will be the largest individual investor in the consortium with 10 per cent, alongside funds run by the private equity firms and other external investors.
The Church, which faced criticism after it emerged that it had invested in a private equity fund that backed Wonga.com, will also have the right to nominate a director to the board, who will be charged with ensuring that the new bank conducts itself in the ethical manner it has pledged. The Archbishop of Canterbury has pledged to set up a credit union to out-compete the controversial Wonga lender.
The consortium investors will technically buy a bond convertible into shares when the new bank is floated, which may not now be until the end of 2015. They will receive up to half of the shares when this happens.
Corsair’s vice-chairman Lord Davies, the former chief executive of Standard Chartered, will join the board of the new bank which, despite his high-profile push to get more women into the boardroom, is so far an all-male affair.
“That is something which will be addressed,” he pledged yesterday.
The chief executive will be John Maltby, most recently head of commercial banking at Lloyds. Before that he spent several years as chief executive of sub-prime lender Kensington Mortgages.
Williams & Glyn’s has 318 branches, previously RBS branches in England and Wales and NatWest branches in Scotland. Their divestment was forced on the bank by the EU as the price of the huge injection of state funds into RBS to keep it afloat.
In a conference call which was light on details, including when the Williams & Glyn’s name will make its appearance on the High Street, Lord Davies promised “an ethically strong bank”.
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