Statement on disposal of UK Branch-based Business
The Royal Bank of Scotland Group (“RBS”) has received notification from Santander UK that it will be pulling out of its agreed purchase of certain UK branch-based businesses (“the business”).
The business includes 316 branches, broadly comprising the RBS branch business in England and Wales, and the NatWest branch business in Scotland, along with certain SME and corporate activities across the UK.
The sale of the business was mandated by the European Commission in 2009 as a condition of its approval of state aid provided to RBS as part of the recapitalisation by the UK Government. Santander agreed to the purchase in August 2010.
"I can assure all affected customers that there will be no disruption to the service they receive. It is business as usual in all of these branches, and customers don’t need to take any action."
Stephen Hester, RBS Group Chief Executive
RBS Group Chief Executive Stephen Hester said:
"I can assure all affected customers that there will be no disruption to the service they receive. It is business as usual in all of these branches, and customers don’t need to take any action.
"While this is a profitable part of our business that we would rather not part with, RBS has worked hard to ensure it is substantially separate from our UK branch network and corporate business and largely ready to be taken on by a new owner. Much of the heavy lifting associated with a transfer has already been completed, including separating data for 1.8 million customers and putting in place a standalone management team.
"It is of course disappointing that Santander decided to pull out of this transaction, especially for the customers and staff involved. However, RBS’s strong progress in our restructuring plans means we can continue to provide a stable home for this business and its customers pending a further resolution.
"RBS will commence a new process of disposal and will provide a further update on this in due course"
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Last week’s annual get-together of central bankers didn’t reveal a clear way forward for gauging labour market slack or when interest rates will rise – topics that have recently dominated discussions at the Bank of England and the US Fed. But it did see the European Central Bank float new ideas on how to bolster the Eurozone recovery.