Santander confirms RBS branches buy

4th Aug 2010 07:09

Santander's UK arm has confirmed the acquisition of more than 300 branches from Royal Bank of Scotland for £1.65bn, slightly less than expected.The deal will catapult Santander UK into the number two slot in UK retail banking. It already owns Abbey, Alliance & Leicester and Bradford & Bingley.Today's acquisition will see it take over 311 RBS branches in England and Wales and seven NatWest branches in Scotland. A further 40 SME banking centres, four corporate banking centres and three private banking centres will also transfer ownership.The RBS business has 1.8m retail customers (c.2% retail market share), over 240,000 SME customers and 1,200 mid-corporate customers.Completion is expected between 15 - 18 months, subject to necessary approvals. Santander said the deal will be EPS accretive from the first year and result in a mid double-digit return on investment by the end of year three."This is a very important strategic deal for Santander in the UK that builds on our retail strength and significantly accelerates our plans to have a substantial presence, and continue to challenge, in the SME and corporate banking sector," said António Horta-Osório, chief executive of Santander UK.Possibly ahead of a float of the UK businesses, Santander UK has also received a £4.45bn equity capital injection from its Spanish parent Banco Santander. The capital will be used to support organic and inorganic growth and result in Santander UK owning all the UK-related group businesses.