Final Bids For RBS Branches Set For Mid-June

Royal Bank of Scotland Group PLC (RBS) has set a mid-June deadline for final bids for its 318 U.K. branches up for sale, a person familiar with the situation said Wednesday.

Due diligence should take place in the next two to three weeks, with Spain's Banco Santander SA (STD) and National Australia Bank Ltd. (NAB.AU) in the process, people familiar added.

According to other people familiar with the situation, Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA) has placed a bid, but the bank is using the RBS offer as an opportunity to get more details on the U.K. market, rather than being seriously interested.

A deal is expected to close by the end of the year, with the actual transfer of the operations taking place in 2011.

Five companies, including Richard Branson's privately held Virgin Money and a consortium of Blackstone Group (BX) and U.K. charity Wellcome Trust, put down bids between GBP1.5 billion and GBP2 billion.

Those two have been eliminated because of low bids, according to people familiar with the situation.

RBS, 83%-government owned, is selling branches in England and Wales, along with NatWest branches in Scotland, and the accounts of some SME customers across the U.K., under European Union requirements.

Combined, the branches have GBP23.6 billion in assets and 6,000 employees.

The bank received the largest state aid in the world following its near collapse during the financial crisis in 2008. The EU has ordered it to cut market shares in some segments to make sure the bank isn't at a competitive advantage to peers that stayed independent.

-By Patricia Kowsmann, Dow Jones Newswires. Tel +44(0)207-842-9295, patricia.kowsmann@dowjones.com

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