Church-backed bid for RBS arm could herald creation of ethical bank on high street

Consortium would create strong addition to Co-op Bank on the high street

The Church of England is backing a bid for hundreds of branches being offloaded by Royal Bank of Scotland, raising the prospect of a new, ethical bank on the high street.

The Church Commissioners, who manage the Church's investments, are helping to fund a consortium led by the former banker and trade minister Lord Davies looking to take control of 315 RBS branches.

With investment decisions by the Church Commissioners taking into account the advice of the Church of England's Ethical Investment Advisory Group, this would suggest consumers will have a new, ethical banking option if the consortium is successful.

That would be a fillip for ethical financial firms following last week's forced bailout of the Co-op Bank.

RBS is selling the branches after being ordered to get rid of them by the European Commission as a consequence of being bailed out by taxpayers. They were due to be sold to Santander, but the £1.65bn deal collapsed last October more than two years after being agreed.

As well as the Church Commissioners, the consortium contains the private-equity firms Corsair – of which Lord Davies is a partner and vice-chairman – and Centerbridge, plus Standard Life, and the City veteran Lord Rothschild's investment trust, RIT Capital.

There are believed to be two other interested groups still in the running for the business: a tie-up between private-equity company AnaCap Financial Partners and US giant Blackstone, as well as a collection of more than 20 asset management firms led by Andrew Higginson, a former finance director of Tesco.

Earlier this week, Virgin Money's chief executive, Jayne-Anne Gadhia, said it was "totally out of the running" for the business.

The Church of England and RBS declined to comment.

The Church of England already holds a small stake in Barclays, and criticised the bank in its annual report last month, saying it had "repeatedly let down society with its conduct".

The Archbishop of Canterbury, Justin Welby, has become a major figure in the struggle to reshape Britain's banking sector due to his position on the Parliamentary Commission on Banking Standards.

He clashed with RBS's chief executive, Stephen Hester, last November in the role, asking: "What is the duty of an enormous bank like yours – approaching 100 per cent of GDP, well into the hundreds of billions of pounds – what is your duty to society, and why didn't you mention it?"

On the side of angels

No pornography, arms or booze are some of the guidelines by which the Church Commissioners' investment decisions are made. Advice is taken from the Church of England's Ethical Investment Advisory Group (EIAG), which was behind the Church's decision last year to sell its stake in News Corporation in the wake of the phone-hacking scandal. The EIAG entered into a year of talks with News Corp, and put forward recommendations, but in the end said the media giant had not "brought about sufficient change".

News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
PROMOTED VIDEO
Arts and Entertainment
Geena Davis, founder and chair of the Geena Davis Institute on Gender in Media
tv
News
Alan Bennett criticised the lack of fairness in British society encapsulated by the private school system
peopleBut he does like Stewart Lee
Sport
John Terry, Frank Lampard
footballChelsea captain sends signed shirt to fan whose mum had died
Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
tv
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
life
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Sport
David Moyes and Louis van Gaal
football
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits