RBS to Consider Sale of Williams & Glyn -- Update
December 16 2015 - 4:52AM
Dow Jones News
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)
Copyright (c) 2015 Dow Jones & Company, Inc.
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