Santander confirms bid for RBS branches

The owner of Abbey, Alliance & Leicester and Bradford & Bingley is the sole bidder for the 318 branches which NatWest owner RBS is disposing of to appease European fears over competition.

The business being sold has around three million customers – two-thirds of which are small businesses – and consists of RBS branches in England and Wales as well as its NatWest outlets in Scotland.

The deadline for bidders closed on Monday with reports putting Santander's offer at between 1.5bn and 1.8bn for the business – below its initial 2bn price.

RBS has been given until 2013 to complete the sale although Santander said yesterday that it "was not possible to say" when the tender process would conclude.

But it is understood that the deal is unlikely to complete before 2011 because RBS must write to all the customers of the branches under the Financial Services and Markets Act seeking any objections to their transfer to another bank.

Santander has long been seen as the frontrunner in the auction due to its determination to gain a stronger footing in UK business banking.

Its mortgage dominance will prevent it from bidding for Northern Rock or the parts of Lloyds Banking Group which are also due to be sold.