Royal Bank of Scotland outlines plan sell banking arm
Royal Bank of Scotland has confirmed plans to put its Williams & Glyn banking arm up for sale after receiving approaches from potential suitors.
Royal Bank of Scotland has confirmed plans to put its Williams & Glyn banking arm up for sale after receiving approaches from potential suitors.
The part-nationalised bank said it had received a number of informal approaches and would launch a sale in the first half of next year, which would run alongside preparations for a stock market listing should it fail to sell the business.
RBS must sell the Williams & Glyn network of 300 branches by the end of 2017 under European Union rules on state aid following the bank's £45 billion bailout at the height of the financial crisis.
It is thought Williams & Glyn could be worth more than £1.5 billion.
Reports suggest buyers could be rival banks from the UK and Europe.
Williams & Glyn has 1.8 million customers, net loans and advances to customers of £20 billion and savings deposits of £24 billion as at the end of September.
RBS said it remains committed to the EU deadline to offload Williams & Glyn, with aims to agree a sale by the end of neat year, with the deal finalised by the end of 2017.
It submitted a banking licence application for the Williams & Glyn arm at the end of September and aims to separate it out from the main RBS business in the first quarter of 2017.
Chief executive Ross McEwan said: Separating out the Williams & Glyn business is a complex process, but we remain focused on meeting our state aid obligation, achieving full divestment by the end of 2017, and reaching the best outcome for shareholders, customers, and staff.''
RBS resurrected the Williams & Glyn brand to appease the EU state aid rules.
But it has already had to push back the deadline to spin-off the branch business, having originally been due to offload it by the end of 2013.
RBS had planned to sell the branches to Santander but the deal was called off in 2012.
Banking expert Gary Greenwood at Shore Capital said the separation of Williams & Glyn remains an ongoing distraction for management'' at RBS.
He added that its latest update on the spin-off suggested the timetable has slipped once again, with the separation of Williams & Glyn now not until the start of 2017, whereas the bank had previously aimed for the second half of 2016.
But he welcomed the prospect of a sale.
A trade sale would represent a cleaner exit than an initial public offering, which may require multiple share sales before the group's holding is fully sold down,'' he said.