If you’ve got £1.5bn and you’re looking to buy 300 bank branches spanning England and Wales then RBS could be your guy. The bank is slimming down and has been ordered by regulators to spin out its retail business south of the border.
The new bank, christened Williams & Glyn after an old RBS subsidiary, is currently awaiting approval for its own banking licence and was expected to be floated on the stock market sometime next year. Now it seems RBS is lining up some trade buyers as an alternative, in a bid to keep its options open.
‘The strategic attractiveness of Williams & Glyn has been reflected in a number of informal approaches for the business,’ it said in a market update today. ‘Therefore whilst continuing preparations for an IPO, we are planning to launch a trade sale process in H1 2016, and targeting the signing of a binding agreement to sell the business by year end 2016, with full divestment by the end of 2017.’
Most of the nation’s, and indeed the developed world’s, big banks are looking to shed staff and property as they try to remain fighting fit for the digital future. So who could find Williams and Glyn’s branches so ‘strategically attractive’?
According to Sky News, Santander is one of the parties drawing up plans for a potential bid. The Spanish bank is a major player in the UK market, but not quite in the same league as the ‘Big Four’ – RBS, HSBC, Barclays and Lloyds. Acquiring Williams & Glyn, and all the customers that come with it, could change that. Sky says another potential suitor is Virgin Money, but it would be more difficult for the rebranded husk of Northern Rock to raise enough cash.
Regardless of who coughs up the dough, RBS has to get rid of Williams & Glyn within the next two years. As it continues to shed other divisions across its business, the former 'biggest bank in the world' will look a lot smaller by the end of the decade.