RBS ready to fire starting gun on sale of Williams & Glyn branches

Royal Bank of Scotland said today it would begin a dual-track trade sale process of its William & Glyn banking business in the first half of 2016.

The strategic attractiveness of Williams & Glyn has been reflected in a number of informal approaches for the business. These have been regrouped under the brand Williams & Glyn and need to be disposed of by… 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 worldwide interest in Britain’s so-called “challenger” lenders, following the takeover of TSB by Spain’s Sabadell earlier this year.

But that timetable was abandoned when Santander pulled out of buying the branches in 2012, forcing RBS to then pursue the stock market offering.

Ana Botin, Santander’s group chairman and the architect of its decisions to pursue and abandon the bid three years ago, recently told investors that she would examine acquisition opportunities in its core markets – of which the United Kingdom is one.

Santander and Virgin Money declined to comment on whether they had made approaches, but neither ruled out their interest.

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 will release more financial information about the business with its full-year results, due on 26 February.

Williams & Glyn’s origins date back to 1753, but the name has been dormant for nearly 30 years.

RBS has been working on the flotation since 2013 with a consortium led by private equity firm Corsair capital and including the Church Commissioners, which manage £5.5bn of investments for the Church of England. Separating the business has been costly and complex, beset by problems separating the technology platform.

The bank, which doesn’t have its own separate licence because it has been operating under RBS’s, could be valued at between 1.5 billion pounds and 2 billion, according to industry estimates.