RBS May Close Sale Of Branches To Santander In August -Source

1st Jul 2010 15:36

By Patricia Kowsmann Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Royal Bank of Scotland Group PLC (RBS) could announce the sale of 318 U.K. branches to Spain's Banco Santander SA (STD) as early as Aug. 6, when it reports its second-quarter results, a person familiar with the situation said Thursday. Banco Santander was the sole final bidder for the branches, estimated to be worth around GBP1.8 billion. Initial bidders included another Spanish bank--Banco Bilbao Vizcaya Argentaria SA (BBVA)--Australia's National Australia Bank Ltd. (NAB.AU), Richard Branson's privately held Virgin Money and a consortium of Blackstone Group (BX) and U.K. charity Wellcome Trust. The 83%-government owned RBS received the largest state aid in the world following its near collapse during the financial crisis in 2008. The European Union has ordered it to cut market shares in some segments to make sure the bank isn't at a competitive advantage to peers that stayed independent. The branches up for sale are in England and Wales, along with NatWest branches in Scotland, and the accounts of some small- and midsize-business customers across the U.K. Combined, they have GBP23.6 billion in assets and 6,000 employees. The deal, if completed, would vault Santander to the No. 4 position in terms of branch-network size in the U.K., a position held by HSBC Holdings PLC (HBC). But, in terms of deposits, widely considered a better measure of market strength, Santander would remain fifth. Lloyds Banking Group PLC (LYG) leads in both deposits and branches. Santander built a network of around 1,300 banks after acquiring Abbey National in 2004, and snapping up ailing lenders Alliance & Leicester and Bradford & Bingley at fire-sale prices amid the banking crisis. -By Patricia Kowsmann, Dow Jones Newswires. Tel +44(0)207-842-9295, [email protected] (END) Dow Jones Newswires July 01, 2010 10:36 ET (14:36 GMT)