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Bank looking for expansion

Clydesdale linked to bid for RBS branches

Clydesdale BankClydesdale and Yorkshire banks’ owner CYBG is believed to be interested in the assets being offloaded by Royal Bank of Scotland.

CYBG, which floated in February, has asked Morgan Stanley to draw up plans for the 315 mainly NatWest branches which RBS wanted to float under the Williams & Glyn brand.

RBS’s  plans were thrown into doubt early this year and on Friday CEO Ross McEwan admitted the flotation had been cancelled and talks were under way with interested parties.

Santander is in the driving seat, but CYBG is said to be exploring a possible offer. Its previous owner National Australia Bank had been one of the front runners when the assets were first offered in 2010.

At the time NAB was keen to expand its UK business, but instead sold its bank in Northern Ireland and later in Scotland and England.

The RBS business being offloaded on the orders of the European Commission would form the seventh largest bank in the UK with two million customers and £24 billion of assets.

But Mr McEwan said it would not achieve returns above the cost of capital invested over five years.

CYBG’s interest is said to be at an early stage, while Santander has already indicated its interest. It is understood to be keen on the substantial small business customer base.

Santander pulled out of a deal in 2012 over IT issues and any deal this time would mean bringing the banks on to its own system.

Virgin Money and Secure Trust Bank, whose directors include former Scottish Secretary Lord Forsyth, have also been linked with the RBS division in recent months though neither has indicated any continuing interest.

 

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