According to the Financial Times on Tuesday, British financial services provider Royal Bank of Scotland Group PLC (RBS,RBS.L) is planning to offload all of its 312 RBS-branded branches in England and Wales in a government-backed move. This is seen as a radical move to satisfy Brussels state-aid authorities that could also boost business banking competition on the high street. The plan could reportedly be implemented as early as the second week of November.
This action is to satisfy the European Union competition authorities' concerns that RBS has about 30% market share of the small business banking in Britain, and Brussels wants to see RBS's operations in the sector reduced by 10%. The bank said last night it was "working towards a solution with the European Commission".
RBS-branded branches in England and Wales mostly serve about one million small corporate customers. The report stated that RBS' NatWest branch network, the group's principal brand in England and Wales, would be unaffected by the proposed plan.
Edinburgh-based RBS has been one of the hardest hit European banks in the prevailing financial crisis, due to its increased exposure to sub-prime loans and its expensive buyout of ABN Amro Holding NV in March 2007, three months before the credit crisis began. Late last year, the British Government took control of RBS with 70% stake in the bank, saving it from going haywire. The U.K. government pumped in 20 billion pounds or US$32.8 billion of rescue funds.
The company is already in the process of selling assets and cutting lending in order to return to profitability. In April, the bank has disposed its 50% stake in Linea Directa Aseguradora to its joint venture partner, Bankinter, for a cash consideration of EUR 426 million. On August 4, RBS announced an agreement with Australia & New Zealand Banking Group Ltd. or ANZ (ANZBY.PK, ANZ.AX) on the sale of a number of its Asian assets for US$550 million.
Earlier, RBS sold its train leasing business Angel Trains in June 2008 for $7 billion after its finances came under strain. However, reports also suggest that the advanced stage discussions between RBS and Standard Chartered Plc (STAN.L) on the remaining Asian retail and commercial businesses have failed.
The initiative to sell the assets are part of a determination to divest noncore assets and narrow the bank's global ambition, after it reported the biggest loss in British corporate history for 2008, posting a loss of GBP 24 billion on a pro forma basis. The bank recorded goodwill write-downs of GBP 16.2 billion relating to its previous acquisitions, mainly ABN AMRO. RBS has also slashed its workforce by about 12,000 jobs this year.
In August, RBS reported a sharply narrower loss for the second quarter of fiscal 2009, helped mainly by the improved performance of its investment banking business. Pro-forma loss was GBP 140 million, sharply narrower than GBP 1.05 billion posted last year. Pro-forma loss before tax narrowed to GBP 252 million from GBP 1.21 billion a year ago. However, RBS also cautioned that its overall results may not substantially improve until 2011.
RBS closed Tuesday's regular trading session at $15.02, down $0.29 or 1.89% on a volume of 0.33 million shares, lower than the three-month average volume of 0.38 million shares.
On the London Stock Exchange, RBS.L closed Tuesday's regular trading session at 46.96 pence, down 1.14 pence or 2.37% on a volume of 92.96 million shares, marginally lower than the three-month average volume of 93.24 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.