RBS to run sale and IPO process
Santander in frame for Williams & Glyn
Santander has emerged as favourite to acquire more than 300 branches which are being packaged for sale by Royal Bank of Scotland .
RBS said it will run a twin-track sale and flotation process for the Williams & Glyn business after receiving interest from potential buyers.
The branches are being carved out of RBS as a condition of the bank’s receipt of state aid in 2008.
Santander, which bought Abbey National and Alliance & Leicester, is now considered a strong contender to buy the new bank which would mean returning for the same business three years after it walked away from a deal.
Santander UK said: “As our executive chairman said at the recent Santander investor day, we will continue to analyse opportunities in our core 10 markets where they add value and benefit to our customers and shareholders. That said, we do not comment on rumours or market speculation.”
Since 2010 Santander UK has built up its small business banking arm, and if it does buy W&G, it could end up with a market share amounting to 10% of SME banking in Britain.
The new bank will carry the resurrected Williams & Glyn brand and will have 1.8 million customers. Santander had been in talks to buy it in 2012.
The plan remains to float the business on the stock market by the end of 2017 and RBS said it is on track to do so. However, it also said it was attracting interest from buyers.
Sabadell, also based in Spain, is another which could take a look at Williams & Glyn. It bought TSB this year just months after it was spun off by Lloyds and floated. However, it recently ruled out a bid for Clydesdale which is due to float in February. Virgin Money, based in Edinburgh and Newcastle, is another which may take an interest.
RBS said in a statement: “The strategic attractiveness of Williams & Glyn has been reflected in a number of informal approaches for the business,” it said in a statement.
“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.”
RBS is now working with the Prudential Regulation Authority and the Financial Conduct Authority towards obtaining a licence and is planning to separate the business from RBS in Q1 2017.
As at end Q3 2015, Williams & Glyn had net loans and advances to customers of £20 billion and customer deposits of £24 billion.
The Williams & Glyn’s name disappeared from British high streets in 1985. It has been recreated for the 314 RBS and NatWest branches that RBS is being forced to sell by the European Union as a condition of its rescue package. Creating the new bank will cost RBS £1.5 billion.
Further financial information on Williams & Glyn will be included in RBS’s full year results announcement on 26 February 2016.
RBS 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.”