Bailed-out RBS eyes plans to offload branches
LONDON: The Royal Bank of Scotland is considering a government-backed plan to sell off more than 300 high street branches to satisfy EU competition authorities, the Financial Times said Wednesday.
RBS, which is 70 percent owned by the taxpayer after it was saved from collapse by a government bailout last year, told the newspaper it was "working towards a solution with the European Commission".
Officials close to the negotiations told the FT the plan was well advanced.
The plan hinges on the EU's concerns that RBS has a 30-percent share of the small business banking market in Britain. Brussels wants to see RBS's operations in the sector reduced by 10 percent.
The bank could achieve this by disposing of its 312 RBS-branded branches in England and Wales, which mostly serve its one million small corporate customers.
The NatWest branch network, the group's principal brand in England and Wales, would be unaffected by the proposals, the report said.
EU Competition Commissioner Neelie Kroes' term of office expires at the end of October, but a deal is unlikely before then. The Commission can however continue to take state aid decisions after that date.
The FT said RBS could be in a position to set out the conclusion of the negotiations by the second week of November.
RBS had to be rescued after it was ravaged by the credit crunch and weakened by its 2007 takeover of Dutch group ABN Amro at the top of the market.
Last year, it recorded Britain's biggest ever corporate loss of more than 24 billion pounds (26 billion euros, 38 billion dollars).