RBS may have to bulk up Williams & Glyn before sale

Royal Bank of Scotland could be asked to increase the size of the Williams & Glyn business, its subsidiary of which outgoing Ulster Bank CEO, Jim Brown is due to head up, which it plans to sell next year after the British government asked for a speedy review of its impact on competition in the banking market.

RBS must sell Williams & Glyn, which consists of 307 branches, as a condition of having received state aid during the 2007-09 crisis.

The UK Treasury yesterday asked the Competition and Markets Authority to assess what impact the sale would have on the British banking market. The authority has no powers to order changes, but the Treasury could ask RBS — which is 80% owned by the British government — to add more branches or make other changes to make Williams & Glyn a stronger “challenger” bank, industry sources said.

The UK government wants Williams & Glyn to increase competition, especially for SME businesses lending. It will be a separately licensed bank with about 1.4m retail customers and more than 200,00 SME customers.

The CMA is already investigating competition in UK banking, but the review into Williams & Glyn will be separate and the findings will be reported by July.

Reuters

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