A former condition set by the European Union to address competition concerns and following the Government’s bail out of RBS, could be amended if an alternative deal is accepted to spare the banks forced sale of Williams & Glyn.
A deal put forward to the European Union would instead allow RBS to provide £750m to finance competition in the UK business banking market.
Headquartered in Manchester, the agreement could see Williams & Glyn branches operate as a challenger bank with 300nbranches and 1.8 million customers.
Despite being considered as an investment option for both Santander and Clydesdale Banks, proposals to acquire the Williams & Glyn business could not achieve a full separation and divestment before the imposed 31 December 2017 deadline.
RBS has taken a £750m provision to fund the new plan which, following agreement from both the European Commission and HM Treasury, would enable RBS to retain the Williams & Glyn business.
Chief Executive of RBS Ross McEwan said that the proposal would provide for increased competition in the SME Marketplace:
He said “If agreed, the new deal would deliver an outcome on our EC state aid divestment obligations more quickly and with more certainty than undertaking a difficult and complex sale and would provide much-needed certainty for customers and staff.”
The EU ordered the disposal of Williams & Glyn as a result of its £45bn government bailout and had originally stipulated that the sale should be completed by 2013 to prevent RBS from being too dominant in the banking sector.
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