RBS to Spend More Than $1 Billion to Appease Authorities
July 26 2017 - 2:05PM
Dow Jones News
By Max Colchester
Royal Bank of Scotland Group PLC will spend more than GBP800
million on measures to increase competition in the U.K. banking
market to atone for breaking European Union rules following its
bailout during the financial crisis, the U.K. government said
Wednesday.
After its 2008 taxpayer rescue, RBS was told to split out 300
branches, to be sold to a competitor or launched as a stand-alone
bank, with the aim of boosting competition in the U.K. and
offsetting the impact of the GBP45.5 billion of state money used to
prop up the bank. But RBS gave up on the branch sale earlier this
year saying it was too complicated. The U.K. Treasury, which
controls a 71% stake in RBS, and the European Commission have since
been negotiating on a suitable remedy.
On Wednesday the European Commission said it signed off on a
plan that aims to transfer a 3% market share in the U.K. small
business banking market from RBS to competing banks. The package
will cost RBS GBP833 million ($1.085 billion), according to the
U.K. Treasury. RBS said it would take an extra provision of GBP50
million in its accounts to cover the costs.
The European Commission's proposals build on suggestions laid
out by the U.K. government earlier this year. These include getting
RBS to hand money to other British banks so that they could lure
small business customers away from the Scottish lender. This was
alongside an RBS fund that these banks can tap to help improve
their franchises.
Investors are watching negotiations closely as its resolution is
seen as a key step toward the bank finally restarting dividends. If
signed off by the College of Commissioners, the EU will adopt its
formal decision in the autumn.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
July 26, 2017 13:50 ET (17:50 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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