Return of Williams & Glyn moves closer
RBS Group (RBSG) has agreed a £600m pre-IPO investment in its Williams & Glyn business (formerly known as "Project Rainbow") - which centres around 314 branches in the UK - with a consortium of investors led by global financial services specialists Corsair Capital and Centerbridge Partners.
In addition to Corsair and Centerbridge, the consortium includes the Church Commissioners for England and RIT Capital Partners plc (together, the "Investors").
RBSG Chairman Sir Philip Hampton said: "We are delighted to be working in partnership with these investors to establish a new challenger bank for UK customers. Williams & Glyn will play an important role in the UK banking landscape and will be an excellent new addition to the market, with a particular strength in small business banking - a sector that is so crucial to the UK's economic recovery. Much has been done already in building the standalone business, and today's announcement provides more certainty for our customers and employees ahead of a flotation."
RBS Group Finance Director Bruce Van Saun said: "This deal concludes what has been a very competitive process, with several highly credible bidders. We believe this transaction demonstrates that Williams & Glyn is a viable and attractive business which will be positioned as a strong, customer-focused challenger bank."
As a condition of the State Aid received by RBSG, the group was required to divest 308 RBS branches in England and Wales and 6 NatWest branches in Scotland, with the associated retail and SME customers, direct SME customers and a portfolio of mid-corporate customers. The business serves nearly 1.7 million customers, currently employs around 4,500 people and in the future will employ approximately 6,000 people. It has a broad national footprint and a £19.7 billion loan book, funded by £22.2 billion in customer deposits.
RBSG will work with HMT and the European Commission to agree an extension to the timetable for the disposal of Williams & Glyn in due course.
Following completion of the operational and legal separation of the business into a standalone bank to be branded Williams & Glyn, an exercise that is already well underway, RBSG will pursue an Initial Public Offering ("IPO"). The pre-IPO investment announced today takes the form of a £600m bond to be issued by RBSG, which will be exchangeable for a significant minority interest in Williams & Glyn at the time of its IPO. The bond will convert into Williams & Glyn shares at the IPO price, subject to a minimum ownership level which will be linked to the tangible book value of Williams & Glyn prior to the IPO, and in any case no more than a stake of 49%. To the extent the maximum ownership level is reached, the bond will be partially redeemed in cash such that the Investors will receive a total value of £600m of cash and shares at the IPO price. At the IPO, subject to RBSG's consent, the Investors will have the option to acquire up to 10 per cent additionally at the IPO price, subject to their pro forma ownership being no more than 49 per cent in aggregate.
The subscription for the bond will be satisfied by way of a cash payment from the Investors. RBSG's Markets division is providing a £270m secured financing package to the Investors for the investment.
This transaction underscores the attractiveness of the new Williams & Glyn as an investment and provides meaningful benefits for RBSG. These include the opportunity to accelerate the timetable for divestment, the ability to benefit from the continued strong performance of Williams & Glyn as well as the improving UK macro and banking environment, and the significant operational and management expertise brought by its new partners, who will be long term investors in the business.
The investment brings a number of high calibre additions to the Williams & Glyn management team, including John Maltby as chief executive designate, and Philip N. Green, Mervyn Davies and Lance West as future directors.
John Maltby brings significant experience of UK retail and commercial banking, most recently as head of Commercial Banking at Lloyds Banking Group. Philip N. Green will join the new Williams & Glyn board, transitioning to Chairman prior to IPO. He brings extensive public company experience including as CEO of United Utilities, non-executive director of Lloyds Banking Group, and an advisor on corporate responsibility to the UK Prime Minister. Mervyn Davies and Lance West between them have a wealth of financial services and public listed company experience in both the UK and the US.
Mervyn Davies, Vice Chairman of Corsair Capital said: "We are delighted to have been selected by RBSG. The Consortium views this as an opportunity to create a genuine challenger bank, which will be a vibrant, healthy competitive force in UK banking and a new financial services provider to the UK public and small and medium sized businesses. There is a great history in the Williams & Glyn brand and the business has an opportunity to be at the forefront of the UK banking industry whilst making an active contribution to the community from its strong regional network."
Lance West, CEO of Centerbridge Partners Europe LLP, said: "We have built the foundations of a strong partnership with RBSG, and are thrilled to continue working together to deliver this new bank."
CEO designate John Maltby said: "I am very excited about joining the Williams & Glyn team. Williams & Glyn will have unique advantages. It will combine the heritage of an established bank, a strong national customer franchise and an experienced and committed team with the agility, motivation and growth opportunities of a challenger. Williams & Glyn will commit to the highest standards of banking ethics and business conduct while providing increased customer choice in the UK Banking market."
The Williams & Glyn business had total assets of £19.7 billion, customer deposits of £22.2 billion and risk-weighted assets of £13.3 billion, as at 30 June 2013. It generated an operating profit of £168 million during the first half of 2013, providing a post-tax return on period end notional equity of c. 16%. The transaction is expected to be marginally dilutive to RBSG's earnings and capital in the period through to the IPO.
For more information, including questions and answers, visit Williams & Glyn updates.
There are 34 comments add yours
- Brian Lever
- May I suggest that you include in your agenda an alternative firm of lending to small businesses and individuals as exampled by ZOPA. 700 chrs is to short to explain why, drop me an email if you want a reasoned explanation. Kind regards Brian lever
- Alexander Teuton
- My Brother who banks with you (16-20-27) has learning difficulties and in view of this there is a standing arrangement that there is an automatic transfer from his Deposit Account to Current Account should the balance on current account fall below £500. Can you confirm please that on transfer to Williams & Glyn's this facility will continue to be provided automatically by the new banks computer system
- Pete Smith
- At least get the name right. The bank I worked for up to the takeover by RBS was called Williams and Glyn's, as you can quite plainly see in the pictures on your page. There was never an entity called Willams and Glyn.
- F Green
- I plan to move my accounts to you asap when you change the branch in my town. We have lost so many building societies and banks in our rural town that I really want to get back to branch banking where people know hwo you are!
- David Peters
- I can't believe that you're referring to this as Williams & Glyn, even on the RBS website, when it should, of course, be Williams & Glyn's. (The apostrophe + s being obligatory!!) I speak as a former employee!
- Martin Shellaker
- As a former employee of Williams & Glyn I am delighted to see the return of the brand in 2015 - 30 years after it became RBS. As exciting as it was for me and my fellow employees of the Maidstone branch to be part of this key event in UK retail banking history on September 30th 1985 (even now I still use my commemorative pen!), we also experienced a sense of loss as this little part of history slipped away. Good luck for the future!
- Richard Austen-Baker
- I'm about to dump Barclays owing to nasty new charging structure for personal overdraft. If RBS's Garstang branch is to be W&G I'd like to switch my banking there. Can anyone tell me if it will be? Otherwise, where nearest? I especially welcome idea that branch managers will be in charge of lending, etc. - nice to think a human who knows your affairs will be in charge, like the old days!
- RBS Moderator
- @ Richard Austen-Baker. Thanks for your comment. The branches that will become Williams & Glyn will be the RBS branches in England & Wales, and NatWest branches in Scotland. The NatWest branch in Glasgow is at 14 Blythswood Square, G2 4AU.
- I would like the new Williams & Glyn bank to spread all over the place, not hidden away from the high street. It will be an excellent opportunity for Williams & Glyn to open its branch in Canary Wharf, London Stratford, etc. If you want to be customer focused, you need to expand and come closer to places where customer needs you most. Current RBS branches needs a fresh new look and new technology. I hope my new bank would offer something that stands out from others. I'm looking forward to it.
- Mick Hull
- Its stated that Williams and Glyn were well known in the 70s 80s. so what went wrong for them to be dormant for 30 years. I have always been happy with RBS service but concerned that my accounts are to be sold on to a defunct business.
- Father Simon
- My wife and I banked with Williams and Glyn's until it became rebranded as RBS, we still bank with RBS, but please if the old name is to be resurrected, do make sure THAT IT IS the old name, with the " 's " at the end, otherwise please explain to us why that can't be.
- The Revd Rod Corke
- I am delighted this is happening. Will ordainary RBS customers get an opportunity to invest in the new bank?
- RBS Moderator
- At every stage of developing our brand, our customers have played a vital part in shaping it. For this reason we’ve decided to call our new bank Williams & Glyn, not Williams & Glyn's. Customers have said we shouldn't use “Bank” in the name, so it is grammatically correct without the ’s. Also for historical accuracy; Williams & Deacon's Bank merged with Glyn, Mills & Co. Finally, digital channels are key to our communications and you cannot use apostrophes in web addresses or in hashtags etc.
- RBS Moderator
- @The Revd Rod Corke - the final details of the Initial Public Offering (IPO) are still to be decided.
- Dominic Chaize
- Whatever Williams and Glyn's was in the past, using the name now for what is in effect a Rothschild investment, is a very bad joke. I don't appreciate having my account sold in any case, least of all to american investors. These people have been deliberately responsible for the recent banking crisis, and cannot be trusted. I therefore intend to transfer my account as soon as possible to Clydesdale or Bank of Scotland.
- Robert GM
- Will W&G have its own environmental management team? If so, how and when can I apply for a role?
- RBS Moderator
- Williams & Glyn is building new teams in many areas including Operations and Facilities. We will advertise roles during 2014 and 2015 on our careers site http://uk.jobs.rbs.com/ where you can search for jobs and also register your interest in working for our bank.
- Derek Addison
- I will be delighted when my Branch returns to be a Williams and Glyn's branch. I enjoyed many happy years banking under the 'old banner' and the staff were always noted for their friendly and efficient approach -- as I must say are the present staff at my branch. I just think that Head Office have lost the way sometimes in recent years and I hope the new executive recognise the value of the branch staff who have helped to keep the ship afloat.
- Brian Talbot
- It wasn't Williams AND Deacons just Williams Deacons. Will my UK RBS account be re-named Williams & Glyn's in the future?
- John Adams
- As a customer of one of the RBS branches in London which will not be transferred to Williams & Glyn, will I still be able to obtain the limited access to my account as I can at present via Natwest branches and ATMs and Tesco ATMs ? Furthermore, will a similar facility be available at Williams & Glyn branches ? On a different note, will there be a Williams & Glyn branch in the Medway Towns, possibly the largest conurbation in Kent, which have never had an RBS Branch ?
- R G Galling
- Is there any hope that this "new" bank will offer any better service and terms for small companies who run a credit balance than the existing big banks which have such poor service and poor reasoning. .
- manoj abrol
- may i suggest standard contactless visa debit card to be issued on the account,i have been with rbs since 2007 ,current a/c ,cheque book but rbs fails to issue contactless visa debit card which i fail to understand.
- RBS Moderator
- @John Adams. We don't know your circumstances but if you have access at Tesco ATMs and NatWest then this is unlikely to change. It's too early to say if we'll provide the same access in W&G branches. We'll contact all customers well in advance if any services change. We continually review our branch network to ensure we have branches in the right places for customers, but we're unable to say now if we'll open a W&G branch in the Medway Towns. Our nearest branches are Maidstone or Dartford.
- H2L. Expert Letting
- We're closing our account and won't be moving to Williams & Glyn. We are now in Day 5 of having no access to our business account due to one particular member of staff in a NatWest Branch not reading notes on the account and putting a No Operation marker on our account without discussion. No one within the bank knows who to speak to. The "Customer Service" Centre in Liverpool dealing with Project Rainbow customers is horrendous and the staff there either don't know what to do or just hang up.
- Oliver Gee
- Please can you confirm that if Contactless cards are going to be issued for account holders migrating to "Williams and Glynn" : That account holders will be able to opt for a non-contactless card if they are not happy with using one due to various concerns over contactless-based card security?
- Oliver Gee
- Please confirm "Chip and Signature" cards will be available via special request for any customers whom do not want or cannot use "Chip and PIN" cards for any reason? I do not want to see customers having to justify why they need to have a "Chip and Signature" card issued; it should be available to any account holder upon request.
- Loopy Loo
- I know I can enter my sort code to find out if my branch is going to be sold to W&G (it is) but I rather like being a customer of RBS. Is there a list anywhere of RBS branches that are NOT being sold?
- Williams & Glyn's is definitely the correct name. I had an account at the Reading branch in the 1970s/80s. I recall that queues were rare, as staff moved onto the tills as necessary to prevent queues forming. These days I rarely use a branch anyway.
- C kierans
- As I have not needed to use a branch for a few years I would still like to stay with RBS as I have not had any problems with the bank in the 38 years I've been a customer but my concern is if the vote is Yes is September what would happen to my account in the future as Scotland would be a separate country.
- Mr Iqbal
- Please look into updating some of the Branches. The Levenshulme (Manchester) Branch is old and tatty, has no Air Conditioning and the windows are not allowed to be opened at any time. The front customer area is so small that we're queuing up outside which beats the time latch purpose on the door's. The cash machine is terribly outdated! I love RBS but having sub-standard facilities does not do a family who hold 11 Accounts there any favours, when there are three alternative Banks.
- As yet another part of the group is being sold off, with no value being given to shareholders who suffered great losses in the banking crash, will shares in W&G be given to RBS shareholders to compensate for further dilution of our holdings?
- Chris Marshall
- It would have been nice to have been sent a letter to tell me I was being transferred to Williams & Glyn rather than discovering when I phoned up customer services and was told to phone a different number as I will not be an RBS customer soon. Bit of a shock I can tell you!
- PJ Sharp
- After Scottish independence, will the bank be English-based and subject to UK regulation or Scottish-based and thus at risk? If the latter, my money is coming out....fast!
- Mick Chapman
- I still have my original William & Glyn's cheque book wallet which is about 46 years old and still in perfect condition with an RBS cheque book in it, I must have known that Williams & Glyn's would be back one day,please put the "s" back where it belongs.