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| Version 1 | Version 2 |
|---|---|
| Setback for RBS in sale of 315 branches | Setback for RBS in sale of 315 branches |
| (about 11 hours later) | |
| A plan by Royal Bank of Scotland to sell more than 300 branches is in trouble after one of the most promising bidders pulled out of talks. | A plan by Royal Bank of Scotland to sell more than 300 branches is in trouble after one of the most promising bidders pulled out of talks. |
| The BBC understands that talks with Spain's Santander broke down because the two sides could not agree a price. | |
| As part of its bailout in 2008, RBS was given until 2017 to sell the branches. | As part of its bailout in 2008, RBS was given until 2017 to sell the branches. |
| It attempted to use them to form a new bank under the Williams and Glyn brand but last month, in the face of rising costs, it abandoned that effort. | It attempted to use them to form a new bank under the Williams and Glyn brand but last month, in the face of rising costs, it abandoned that effort. |
| Since then, RBS has been looking for buyers for the 315 branches and their associated personal and business accounts, and Santander was seen as the front runner. | Since then, RBS has been looking for buyers for the 315 branches and their associated personal and business accounts, and Santander was seen as the front runner. |
| But the prospect of a further cut in UK interest rates has undermined that deal, as lower rates cut into the profits of High Street banks - making the RBS branches less attractive. | But the prospect of a further cut in UK interest rates has undermined that deal, as lower rates cut into the profits of High Street banks - making the RBS branches less attractive. |
| Analysis: Simon Jack, BBC business editor | |
| Once again RBS is in a tough spot. It is legally required to sell 315 branches by the end of next year to satisfy EU rules on state aid after the tax payer funded a £45bn rescue in 2008. | Once again RBS is in a tough spot. It is legally required to sell 315 branches by the end of next year to satisfy EU rules on state aid after the tax payer funded a £45bn rescue in 2008. |
| This latest setback raises the spectre of a fire sale of assets still 73% owned by the government - which means us. | This latest setback raises the spectre of a fire sale of assets still 73% owned by the government - which means us. |
| So what now? The BBC understands that Santander may still be interested but wants to radically reset the price point from the £1.6-1.9bn range previously bandied about. | So what now? The BBC understands that Santander may still be interested but wants to radically reset the price point from the £1.6-1.9bn range previously bandied about. |
| There are other potential bidders out there - but not many. The company that owns Clydesdale and Yorkshire banks is thought to still be in the hunt. Another potential candidate - the TSB, offloaded by Lloyds under similar regulatory pressure - have up to now ruled themselves out. | There are other potential bidders out there - but not many. The company that owns Clydesdale and Yorkshire banks is thought to still be in the hunt. Another potential candidate - the TSB, offloaded by Lloyds under similar regulatory pressure - have up to now ruled themselves out. |
| There is an outside chance that a private buyer - like US based Corsair Capital - might buy the company with a view to selling in 5 years or so when the rain clouds on banking clear. | There is an outside chance that a private buyer - like US based Corsair Capital - might buy the company with a view to selling in 5 years or so when the rain clouds on banking clear. |
| What does seem clear is that the price taxpayers will get for something they 73% own has taken another downward turn. | What does seem clear is that the price taxpayers will get for something they 73% own has taken another downward turn. |
| Read more from Simon here | Read more from Simon here |
| The sale also comes at a time when banks are reducing the size of their branch networks as more customers are banking online. | The sale also comes at a time when banks are reducing the size of their branch networks as more customers are banking online. |
| Last month RBS reported a $2bn loss for the first six months of the year, which it blamed on past issues, including the mis-selling of payment protection insurance. | Last month RBS reported a $2bn loss for the first six months of the year, which it blamed on past issues, including the mis-selling of payment protection insurance. |
| It also said that it spent £345m attempting to form the Williams and Glyn unit. | It also said that it spent £345m attempting to form the Williams and Glyn unit. |