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.

Start your day with The Independent, sign up for daily news emails
News
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
Arts and Entertainment
Secrets of JK Rowling's Harry Potter workings have been revealed in a new bibliography
arts + ents
News
Down-to-earth: Winstone isn't one for considering his 'legacy'
people
News
news
ebooks
ebooksA special investigation by Andy McSmith
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

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower