WHEN the British Government stepped in to bail out the Royal Bank of Scotland with a staggering £45 billion (€52.3 billion) injection, the European Union ruled that it would have to divest itself of the Williams and Glyn business which consisted of slightly more than 300 branches of former RBS and Nat West banks.
The group which still has a 72 per cent holding owned by the government has been trying to do this for several years but without success. An early offer from Santander in 2012 broke down when the Spanish Bank withdrew due to fears over the safety of the bank’s IT system and an apparent exodus of customers but they returned in 2016 for further discussions.
Now Santander has announced that it cannot agree a purchase price with RBS which was said to be looking for £1.9 billion (€2.2 billion) although it is said that it would be interested at a lower price.
This may be a matter of brinkmanship as RBS currently has until the end of 2017 to make a sale or face either a heavy EU fine or a forced sale although it has been suggested that the government should simply refuse to let it make a sale and then ignore any resulting penalty as Britain is leaving the EU soon after.