RBS may halt flotation of Williams & Glyn as buyers show interest

A view of The Royal Bank  of Scotland's headquarters in the City of London Photo: Stefan Rousseau/PA Wire
A view of The Royal Bank of Scotland's headquarters in the City of London Photo: Stefan Rousseau/PA Wire
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Royal Bank of Scotland may ditch plans to float its Williams & Glyn business after attracting interest from buyers.

RBS said it would consider the sale of the 300-strong branch network after receiving a number of informal approaches for the unit, while also preparing it for a possible flotation in the first quarter of 2017.

Williams & Glyn could be valued at about £1.5bn, which analysts estimate is its book value. RBS, 73 per cent owned by the government, was ordered to sell the network by European competition authorities as a cost for being bailed out by the taxpayer in 2008.

The launch of a formal sale process follows a flurry of international interest in Britain’s so-called ‘challenger’ lenders.

After buying the TSB branches, Sabadell chief Jaime Guardiola said there was room for further consolidation among mid-sized UK lenders and his bank was “in a position to grow”.

RBS did not name the possible bidders, but they could also include Spain’s Santander, which already owns one of the biggest UK retail banks and was close to buying the RBS branches three years ago, and Clydesdale, the UK retail bank set to be demerged by parent National Australia Bank in February, industry sources and analysts said.

A spokesman for Santander said the lender did not comment on market speculation but pointed to a speech by chairwoman Ana Botin at a recent investor day, in which she said Santander would “continue to analyse opportunities” in its core 10 markets, which include the UK.

Earlier this week, David Duffy, the chief executive of Clydesdale, told reporters that he was focused on the demerger and IPO process, and only once the bank had proven its track record of delivery, would it earn the right to conversations about potential acquisitions.