UK Edition
Santander intensifies talks to buy Royal Bank of Scotland spin-off
Santander UK has submitted an offer to buy Williams & Glyn from Royal Bank of Scotland, in a move which could end RBS’s suffering as it tries to carve out the new lender.
RBS was ordered to set up the new bank by the European Commission under the terms of the 2008 bailout.
Carving out the 316 branches, 1.8m customers and 250,000 business accounts and setting up a new IT system has proved very difficult and extraordinarily expensive, however, and RBS fears it will miss its deadline of the end of 2017 – potentially landing it in trouble with the authorities.
Santander UK considered paying £1.2bn for the new bank in 2012 but dropped the deal, only to come back to consider a new bid late last year.
In a development first reported by Sky News, the bank has at last pieced together an early-stage offer.
Such a deal could help RBS as Santander may be able to take some of the loans and customers directly onto their own IT system, sparing RBS the trouble of setting up the new technology infrastructure.
RBS has spent £1.2bn so far to split out the bank and currently has more than 6,000 staff working full-time on the project.
Just last week Santander UK’s boss Nathan Bostock played down the idea that he could bid for W&G, dismissing discussion of a purchase as “market speculation” and claiming that he was focused on growing the business without any acquisitions.
“We are focused on organic growth. We have built ourselves a business both on the retail side and the SME and corporate side, and are capable of growing at a good pace in an organic way, and we’ve been delivering results on that consistently over the last few years,” the chief executive said.
“From a broader perspective our group chairman has said that with regard to inorganic growth, it would only happen within in-field, countries in which Santander already has core businesses, and if it was to be the case they would obviously have to be such investments that would meet all of the various stakeholders’ hurdles. So that is all I can say on that. Anything else is just market speculation.”
RBS declined to comment.