UK to assess impact of RBS proposed sale of Williams & Gyn

28th May 2015 09:20

The UK government said it has instructed competition regulators to assess the impact Royal Bank of Scotland's planned sale of Williams & Glyn would have on the banking sector.The Competition and Markets Authority has been asked to look into the sale as the government wants Williams & Glyn, which has 307 branches across England, Wales and Scotland, to become a "strong competitive challenger" to the main high street lenders.The CMA said its assessment on the implications of the proposed sale is meant to help RBS and the government to determine whether more measures could be taken to ensure competition in the banking sector."The divestment of Williams & Glyn represents an opportunity to improve competition in the small business banking sector," the government, which still owns approximately 80% of RBS, said in a statement."Today's announcement is another step in the government's long term plan to improve competition in banking, and create a banking sector that gives real choice to retail and small business customers and supports the wider economy."The CMA said the findings will be released in July and RBS and the government will consider their strategy afterward, while theBank of England's Prudential Regulation Authority will assess whether Williams & Glyn has a "viable and sustainable" business model.As part of the bailout agreement RBS struck with the government during the financial crisis, the European Commission, the executive arm of the European Union, requires the lender to divest Williams & Glyn by 2017.RBS shares were up 0.20% to 347.80p at 09:52 on Thursday.