Spain's Santander bids for RBS branches

18th June 2010, Comments 0 comments

The biggest Spanish bank Santander said on Friday that it had made an offer to Royal Bank of Scotland, bailed out by the British government, to buy about 300 of its branches in Britain.

Santander did not say how much it would pay RBS for the branches which would add to the 1,300 it already has in Britain after its takeovers of Abbey in 2004, Bradford and Bingley and Alliance and Leicester in late 2008.

"Banco Santander announces that its affiliate Santander UK has submitted an offer in the tender process of approximately 300 branches of Royal Bank of Scotland," it said.

"Currently, it is not possible to say when the tender process will conclude," it added.

In London, RBS confirmed "that Santander has submitted a bid which we are seriously reviewing.

"This remains a competitive process and we will continue to do what is right for our shareholders and customers in disposing of these assets which present an excellent opportunity for either a new entrant or a bidder who wants to consolidate their position as a major player in the UK banking sector."

Reports earlier this week said Santander was the only bidder and had offered 1.8 billion pounds (2.2 billion euros, 2.75 billion dollars) for the branches.

RBS, 83-percent owned by the British government after being bailed out, has 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.

Union reaction to the deal was hostile.

"This move by Santander ... is yet another nail in the coffin of the diverse financial services sector which consumers have long benefited from. Simply on the basis of market competition ... this sale is bad news," said Rob MacGregor for the Unite union.

"Santander already own branches of Abbey National, Alliance and Leicester and Bradford and Bingley, there is a danger that soon British customers will only have one provider to choose from," MacGregor said.

"Where does this daily consolidation in the sector leave the (government's) commitment to a diverse financial services industry?" he added.

© 2010 AFP

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