RBS Royal Bank of Scotland Group PLC

By Max Colchester 

LONDON-- Royal Bank of Scotland Group PLC on Wednesday said it is considering selling its Williams & Glyn unit after receiving interest from potential buyers, as it races to meet rules which require it to shed the business by 2017.

Following its government bailout RBS is required under European Union state aid rules to spin off 314 branches. These have been regrouped under the brand Williams & Glyn and need to be disposed of by the end of 2017.

RBS had planned to launch an initial public offering of the unit, but after receiving "a number of informal approaches for the business," it said it would now also explore a sale to a competitor in the first half of 2016, which it hopes can be done by the end of 2017. The bank said it had made significant progress separating the branches, which have 1.8 million customers.

The potential sale comes as a host of smaller banks look to consolidate and boost their market share following a push by regulators for more competition in the British market. Lloyds Banking Group PLC was also forced to spin off branches following its bailout. These were eventually snapped up by Spanish lender Banco de Sabadell after a brief period of trading as an independent company. As well as Williams & Glyn, other potential targets for consolidation include the Co-operative Bank PLC. National Australia Bank Ltd. is also shedding its U.K. business.

For RBS the process of breaking off the branches has proved tortuous. A plan to sell the branches to Santander UK in 2012 fell through amid concerns about the bank's technology. RBS now has 5,000 staff working on the process. Williams & Glyn still doesn't have its own banking license. RBS submitted for one in September.

In 2013 RBS announced a plan to list the business. A consortium of investors led by U.S. private equity company Corsair Capital pledged to take a stake in the stand-alone bank. The consortium of investors, which included the Church Commissioners for England, who manage the assets of the Church of England, said they would pay GBP600 million ($962.5 million) for a bond that will convert into no more than a 49% stake in the branches once they are spun off.

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

December 16, 2015 04:37 ET (09:37 GMT)

Royal Bank of Scotland (NYSE:RBS)
Historical Stock Chart
From Mar 2024 to Apr 2024

Royal Bank of Scotland (NYSE:RBS)
Historical Stock Chart
From Apr 2023 to Apr 2024