New contenders emerge in tortuous Williams and Glyn’s sell off

60 branches axed

CLYDESDALE and Yorkshire Bank Goup has tabled an offer which has boosted state-owned lender Royal Bank of Scotland’s bid to offload its Williams & Glyn’s business.

CYBG has confirmed was engaged in discussions with RBS and has made a non-binding proposal to the bank in relation to its Williams & Glyn operations.

Reports suggest the deal – following the withdrawal of prior contender Santander last month – is less than the £1.3bn valuation for the 314-branch network.

CYBG has confirmed it has submitted a preliminary proposal for W&G, but says talks with RBS were ongoing with no certainty the sale would go ahead.

RBS is selling the branches under the instruction of the European Commission under the terms of its £45bn bailout at the height of the financial crisis.

A deadline has been set of the end of 2017 for RBS to dispose of W&G, although RBS is expected to warn this may be missed when its Q3 results are announced on Friday (October 28).

Setting up a separate IT system for the W&G network has been the main obstacle for the deal, turning it into a tortuous process.

It has proved complicated, expensive and time-consuming because of RBS’ antiquated computers.

RBS scrapped plans to float W&G in August after splashing out £1.5bn on a computer network for the branches.

An agreement to sell the business to Santander also failed in 2012 when IT concerns prompted the bank to pull out.

After that, RBS changed course and secured a £600m bond investment from a consortium including the Church Commissioners, as part of a deal that was designed to help the bank spin-off the branches.

CYBG became independent following the demerger and IPO of the group in early 2016. It insisted it would only commit to a deal if it found that it was in line with strategic objectives and in the best interests of CYBG shareholders.

The banking group has also been under pressure, after its bill for mis selling PPI rose by £450m earlier this year. The total now stands at £2.1bn.

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