Santander Eyes RBS Unit
August 02 2016 - 11:40AM
Dow Jones News
Banco Santander SA's U.K. operation has made an offer to acquire
Royal Bank of Scotland Group PLC's Williams & Glyn unit,
pouncing as the British bank struggles to unload the retail
business ahead of a 2017 deadline, according to people familiar
with the matter.
No details of the offer have, so far, been forthcoming.
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 next year.
The separation has been dogged with technology problems and
delays. RBS, which is 73% owned by the British government, said
earlier this year that there was "a significant risk" it couldn't
spin off the branches by that deadline, making an initial public
offering of William & Glyn look unlikely.
RBS has since been exploring other ways of shedding the
branches. These include going down the route Lloyds Banking Group
PLC chose when it also had to meet similar EU requirements. Lloyds
created a new bank, TSB, but didn't move all its computer systems
onto a new platform. Many of TSB's operations use Lloyds's
technology. The Santander deal could be structured in a similar
way.
For Santander UK, Williams & Glyn could help bolster its
presence in corporate lending to small British businesses, a part
of the market it has been looking to grow.
However, RBS has been here before. A plan to sell the branches
to Santander in 2012 fell through, amid concerns about the bank's
technology. Today RBS has 5,000 staff working on the process of
separating the bank. Williams & Glyn still doesn't have its own
banking license.
Bankers say that a slew of smaller challenger U.K. banks could
merge as they seek to weather the fallout from Brexit. Santander UK
isn't the only finance company looking at the Williams & Glyn
unit, according to one person familiar with the matter.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
August 02, 2016 11:25 ET (15:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Banco Santander (NYSE:SAN)
Historical Stock Chart
From Aug 2024 to Sep 2024
Banco Santander (NYSE:SAN)
Historical Stock Chart
From Sep 2023 to Sep 2024