Royal Bank of Scotland sells 318 branches to Santander
Britain's state-controlled Royal Bank of Scotland on Wednesday agreed to sell 318 branches to Santander in a deal that will further expand the Spanish group's presence on the high street.
The bailed-out bank, which is due to unveil first-half profits on Friday, said it would sell the branches in a transaction worth an estimated 1.65 billion pounds (2.0 billion euros, 2.6 billion dollars).
RBS, 83-percent owned by the British government, is selling assets in line with a demand made by the European Commission, in exchange for the state aid it received during the global financial crisis.
"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."
Antonio Horta-Osorio, chief executive of Santander UK, hailed the move as an "important" step for the group, which already has 1,300 bank branches in Britain after a series of carefully-timed takeovers over the last six years.
"This is a very important strategic deal for Santander in the UK that builds on our retail strength," he said, adding the transaction will expand its activities in small and medium-sized business sector.
The acquisition will see Santander add to the branches it already owns in Britain after its takeovers of Abbey in 2004, Bradford & Bingley and Alliance & Leicester in late 2008.
"Through the Abbey, Alliance & Leicester and Bradford & Bingley acquisitions, Santander UK has demonstrated that it can integrate complex and large-scale businesses successfully," added Horta-Osorio.
"The process of transferring the RBS and NatWest branches, together with associated customers and accounts, will take place towards the end of 2011."
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. The deal is expected to conclude in December 2011.
Together, the 318 branches serve 1.8 million retail customers, 244,000 SME (small and medium-sized enterprise) customers and 1,200 mid-sized corporate customers.
© 2010 AFP