RBS staff in limbo after Santander deal collapses
HUNDREDS of Royal Bank of Scotland (RBS) staff in Manchester are in limbo after Santander pulled the plug on a deal to buy 316 branches.
RBS staff have already moved out of their Spinningfields offices ahead of the planned switchover and are now based at the bank’s old base in Mosley Street.
The European Commission ordered RBS to offload the branches by 2013 as a condition of the £45bn state aid it received to prevent its collapse at the height of the banking crisis in 2008.
Santander agreed to pay £1.65bn for the branches – with 120 of them in the North West – in August 2010. The collapse of the deal was blamed on delays in marrying the different software systems. Richard Branson’s Virgin Money is now said to be interested in the branches.
RBS group chief executive Stephen Hester said: “While this is a profitable part of our business that we would rather not part with, RBS has worked hard to ensure it is substantially separate from our UK branch network and corporate business and largely ready to be taken on by a new owner.
“Much of the heavy lifting associated with a transfer has already been completed, including separating data for 1.8 million customers and putting in place a standalone management team.
“It is of course disappointing that Santander decided to pull out of this transaction, especially for the customers and staff involved. However, RBS’s strong progress in our restructuring plans means we can continue to provide a stable home for this business and its customers pending a further resolution. RBS will commence a new process of disposal following discussion with the EC and will provide a further update on this in due course.”
In a brief statement Santander UK chief executive Ana Botin said: “Our guiding principle throughout this transaction has been a seamless journey for customers – which requires the business to be delivered to Santander UK by RBS in a steady state. We have concluded that given delays it is not possible to complete this within a reasonable timeframe.”
The deal affects 1.8 million retail customers, around 244,000 small and medium-sized enteprise (SME) customers and around 1,200 in the mid-corporate bracket. It was expected to complete towards the end of 2011.
