Virgin knocked out of RBS bid battle

Virgin Money is out of the race for more than 300 Royal Bank of Scotland branches put up for sale to satisfy the European Commission, it emerged last night.

The auction is now a straight fight between Abbey owner Banco Santander and National Australia Bank, which owns the Yorkshire and Clydesdale banks. Virgin, whose bid was backed by US tycoon Wilbur Ross, had tried to sell its offer to the Government – which owns 84 per cent of RBS – by pledging no branch closures or job losses.

However, it is understood that it was several hundred million pounds lower than the highest bidder, with RBS focused on achieving the highest price possible for the business as it grapples with restoring itself to financial health.

The branches, together with the revived Williams &Glyn's brand, are expected to fetch in excess of £1bn with Santander rated as the most likely winner. It could float its UK arm to help finance a deal.