British bank RBS sells 318 branches to Santander
British state-controlled Royal Bank of Scotland said on Wednesday it had agreed to sell 318 branches to Spanish group Santander in a long-awaited deal.
"RBS announces today that it has agreed to sell 318 branches and associated assets and liabilities to Santander UK plc for a premium of 350 million pounds (557 million dollars) to net assets at closing," it said in a statement.
The bailed-out bank, which is due to unveil first-half profits on Friday, said it would sell the branches in a transaction valuing them at 1.65 billion pounds on December 31, 2009.
However, the final amount that Santander will pay for the business will not be clear until December 2011, when the deal is expected to be completed, subject to regulatory approvals.
"This is an important milestone in our restructuring work and complements the significant momentum behind our recovery plan overall," said RBS chief executive Stephen Hester in the statement.
"The bank is becoming stronger, which allows an increased focus on serving ongoing customers and improving commercial success; all a pre-requisite for the profitable realisation of taxpayers' stake in RBS."
The acquisition will see Spanish banking giant Santander add to the 1,300 branches it already owns in Britain after its takeovers of Abbey in 2004, Bradford & Bingley and Alliance & Leicester in late 2008.
RBS, 83-percent owned by the British government after being bailed out, had until 2013 to cut its branch network in line with a demand made by the European Commission, in exchange for the aid it received in the financial crisis.
"I am pleased that by reaching the sale agreement early we can provide customers and staff with greater clarity on their future," added Hester on Wednesday.
"Santander will be a good owner of these assets. The divestment will make them a stronger competitor in UK banking, especially in the SME (small and medium sized enterprise) and mid-corporate sectors."
The sale comprises 311 RBS-branded outlets in England and Wales, and seven NatWest-branded stores in Scotland, and also includes customer accounts attached to those branches.
© 2010 AFP