‘Ring-fencing’ an obstacle to Williams & Glyn sale

The ‘ring-fencing’ of banks’ retail and investment divisions is set to make a Williams & Glyn disposal for RBS problematic.

Government plans to force banks to split up the division could cause trouble for the bank, which both Spanish bank Santander and Clydesdale and Yorkshire Banking group have bid for.

Proposed delays to plans to sell the bank until 2018 will complicate the process, according to The Telegraph, and may force Williams & Glyn to become part of the RBS retail banking business.

Government plans would create a legal separation between bank’s investment and retail banking – the latter of which would include online, customer and small business. It is thought that the plans would insulate banks from another financial crisis.

Yorkshire Bank group made the surprise bid for the bank in October 2016 after a deal with Santander had fallen through only a month before.

CYBG boss David Duffy was forced to defend the bid, after the group made its first pre-tax profits in five years following its IPO last year. The group has been hit with PPI misselling claims which now amount to more than £2bn and has also announced hundreds of job cuts this year as its looks to slim down its operations.

RBS is being forced to sell Williams & Glyn by the European Commission as a condition of its £45bn bailout at the height of the financial crisis.

It has struggled to sell off the 314 branches over a seven-year process, with IT issues holding it back

RBS has attempted to set Williams & Glyn up as an independent bank with its own internal structure, but had to scrap plans for a float, having spent £1.4bn in its attempts.

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