Santander UK is reportedly considering a surprise bid for 300 Royal Bank of Scotland branches in the UK after pulling out of the same deal three years ago.
The Spanish-owned bank is thought to be eyeing RBS’s Williams & Glyn network after it ended exclusive talks to buy the business in autumn of 2012, at the time citing delays to the completion of a deal.
Newcastle-based Virgin Money is also understood to be looking at a bid for the branches, valued at more than £1.5 billion, according to Sky News.
RBS, which is 73% owned by the taxpayer, confirmed earlier today it would launch a formal sale process in the first half of next year after receiving a number of informal approaches, which would run alongside preparations for a stock market listing should it fail to sell the business.
It must sell the Williams & Glyn network of branches by the end of 2017 under European Union rules on state aid following the bank’s £45 billion bailout at the height of the financial crisis.
Santander declined to comment on its reported interest in Williams & Guy, but a spokesman said its chairman Ana Botin recently told investors it “will continue to analyse opportunities in our core 10 markets where they add value and benefit to our customers and shareholders”.
Spain’s Sabadell, which bought UK lender TSB earlier this year, has also said it is interested in further growth in the UK, while giant Spanish lender BBVA does not have UK presence and may also consider a bid, according to industry sources.
Clydesdale, the UK retail bank set to be demerged by parent National Australia Bank in February, has likewise been linked to the sale.
Private equity bidders may also look at plans to buy the network.
Williams & Glyn has 1.8 million customers, net loans and advances to customers of £20 billion and savings deposits of £24 billion as at the end of September.
RBS said it remains committed to the EU deadline to offload Williams & Glyn, with aims to agree a sale by the end of neat year, with the deal finalised by the end of 2017.
It submitted a banking licence application for the Williams & Glyn arm at the end of September and aims to separate it out from the main RBS business in the first quarter of 2017.
Chief executive Ross McEwan said: ”Separating out the Williams & Glyn business is a complex process, but we remain focused on meeting our state aid obligation, achieving full divestment by the end of 2017, and reaching the best outcome for shareholders, customers, and staff.”
RBS resurrected the Williams & Glyn brand to appease the EU state aid rules.
But it has already had to push back the deadline to spin-off the branch business, having originally been due to offload it by the end of 2013.
RBS had planned to sell the branches to Santander but the deal was called off in 2012.
Banking expert Gary Greenwood at Shore Capital said the separation of Williams & Glyn remains an ”ongoing distraction for management” at RBS.
He added that its latest update on the spin-off suggested the timetable has slipped once again, with the separation of Williams & Glyn now not until the start of 2017, whereas the bank had previously aimed for the second half of 2016.
But he welcomed the prospect of a sale.
”A trade sale would represent a cleaner exit than an initial public offering, which may require multiple share sales before the group’s holding is fully sold down,” he said.