RBS tries to find fresh suitors for branch network
London, November 24, 2012
Royal Bank of Scotland has sent sales documents to prospective buyers of the branches it is being forced to sell, in the hope it can draw up a shortlist next month, sources said.
Information was despatched this week to trade buyers Nationwide and Virgin Money, private equity player JC Flowers and another suitor, sources said on Friday.
RBS was ordered to sell 316 branches by European regulators as a condition of receiving a 45 billion pound ($71.76 billion) bailout in 2008 which left it 81 percent government owned.
It was forced to restart the sale process after Spain's Santander pulled out of a deal to buy the branches last month.
RBS has received expressions of interest from Corsair Capital, led by former Standard Chartered chairman Mervyn Davies, and a joint venture between Blackstone and Anacap, the backers of new bank Aldermore, one of the sources said. The same source added that the bank wanted to have a firm shortlist of possible buyers in place by the middle of December.
J.C. Flowers is interested in buying the branches as part of its plan to expand in UK financial services and build on the Kent Reliance business it bought last year, another source said. Flowers could look to team up with another private equity firm given the size of the RBS business, that source said.
Virgin Money is looking at further expansion opportunities having purchased Northern Rock last year. Nationwide, Britain's biggest building society, would also like to build up its branch network and strengthen its challenge to the major banks.
RBS is now likely to receive considerably less than the 1.65 billion pound price agreed with Santander, which withdrew two years after the deal was agreed, citing difficulties relating to technology and integration.
UK retail banking assets are proving tough to sell with stringent regulatory and funding hurdles making it difficult for potential new entrants to break into the industry. Lloyds had to settle for less that it originally expected when it agreed to sell 632 branches to the Co-operative group in what was another sale mandated by EU regulators.
UBS is advising RBS on the sale process, which has been code named "Rainbow". Both UBS and RBS declined to comment on the identity of the interested parties. – Reuters