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Bank wants to abandon asset sale

European Commission to investigate RBS plan

RBS St Andrew SqEuropean Commissioners will hold a month-long inquiry into Royal Bank of Scotland’s proposal to abandon its sale of assets,

The bank has set out a plan to abandon the requirement placed on it by the Commission in 2009 that it should sell 300 branches as a condition for receiving a bail-out from the taxpayer.

Instead it wants to set up a £750m fund to support challenger banks and SMEs.

RBS intended to offload the branches under the revived Williams and Glyn brand, with assets of £20bn.

But it has failed either to find a trade buyer for the division, or to float it on the stock exchange.

The bank has spent more than £1.5 billion trying to get Williams & Glyn ready for separation, much of that on the complex process of disentangling the IT platform and creating a new one.

It received interest from Santander, twice, and Clydesdale Bank but neither was able to conclude a deal.

The European Commission has begun a month-long in-depth investigation, inviting the UK government as well as others to submit their views.

Commissioner Margrethe Vestager, in charge of competition policy, said: “RBS is the leading bank in the UK SME banking market and received significant state support during the financial crisis.

“The commission is now seeking the views of all interested parties on an alternative package proposed by the UK to replace RBS’s commitment to divest Williams and Glyn.

“We can only accept this proposal if it has the same positive effect on competition as the divestment of Williams and Glyn would have had. This is important for fair competition.”

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