RBS abandon plans to sell Williams & Glyn

The Royal Bank of Scotland (RBS) has abandoned plans to sell Williams & Glyn following an alternative plan proposed by the Treasury.

RBS abandon plans to sell Williams & Glyn

RBS confirmed it will seek formal amendments to its state aid commitments to pave the way for this new proposal which will replace the need to sell Williams & Glyn. 

This proposal would require the bank to deliver a series of initiatives worth an estimated £750m to boost competition in the UK business banking market.

Ross McEwan, chief executive of RBS, said this proposal would provide a quicker solution to its state aid obligations than the complex sale of Williams & Glyn.

The plan would aim to deliver the following remedies to promote competition in the market for banking services to SMEs in the UK:

  • A fund, administered by an independent body, that eligible challenger banks can access to increase their business banking capabilities;
  • Funding for eligible challenger banks to help them incentivise SMEs to switch their accounts from RBS, paid in the form of “dowries” to eligible challenger banks; 
  • RBS granting business customers of eligible challenger banks access to its branch network for cash and cheque handling, to support the measures above; 
  • An independent fund to invest in fintech to support the business banking of the future.

The bank said it will assess the timing and manner in which it will reincorporate Williams & Glyn into the RBS franchises following the proposed plans being finalised.

It added: “This reintegration would likely create some additional restructuring charges during 2017 and 2018.”