RBS asks for more time to sell branches after deal collapses

 

Royal Bank of Scotland and the Treasury are preparing to lobby the European Commision to allow the taxpayer-controlled bank more time to sell 316 branches after a deal with Santander UK collapsed.

Virgin Money and the private-equity group JC Flowers are both looking at reviving offers they put forward before losing out to Santander two years ago.

The current deadline for a sale is by the end of 2013, but RBS is looking to be allowed to reach an agreement on a deal which could complete in 2014.

It will argue that it needs more time to complete a sale as decreed by the European Union and is also pointing out that EU rules on state aid for banks have altered in the five years since it received £45bn of taxpayers' money.

Shares in RBS initially fell by as much as 4 per cent, before closing down 2.8p at 268.1p.

Sir Philip Hampton, the chairman of RBS, is likely to spearhead negotiations with the EU alongside Greg Clark, Financial Secretary to the Treasury.

Mr Hampton said: "What's changed since the original decision is the climate around state aid. The commission has been much, much more flexible. It used to be a pretty severe regime but they are making different judgements.

"The UK retail banking market is more competitive now than it has been for decades."

In March, Germany's Commerzbank, which received an €18.2bn (£14.6bn) bailout in 2008, was let off an earlier order by the commission that it must sell its property finance business. But analysts point out that if RBS is let off the hook on selling branches, it could anger Lloyds Banking Group, which was forced to sell more than 600 branches to Co-op Bank.

Stephen Hester, RBS's chief executive, has asked the investment bank UBS to revive the sales process and to look again at an initial public offering of the business, which could see it resurrect the name Williams & Glyn's, a brand previously used for small business banking. Analysts said a new sale is likely to fetch £500m to £1bn less than the £1.65bn which Santander originally offered.

However, RBS said that since the branches it is being forced to sell are highly profitable, so it actually benefits from each day it continues to own them.

Meanwhile RBS has suspended its head of rates trading Jezri Mohideen, according to Bloomberg – the first senior manager to be put on leave as part of its investigation into Libor rigging allegations. Mr Mohideen has previously denied pressuring colleagues to lower RBS's submissions to the Libor-fixing committee.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

.NET Software Developer (.NET, C#, ASP.NET, front-end)

£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...

C# Web developer (C#,MVC,ASP.NET,SQL)

£30000 - £40000 per annum + Bonus+Benefits+Package: Harrington Starr: C# Web d...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried