Building society’s executives are closely watching sale process for 316 branches that RBS must sell by end of next year
Nationwide Building Society has emerged as a potential bidder for the 316 branches that Royal Bank of Scotland must sell to meet state aid rules from Brussels.
The interest of the UK’s largest building society will come as a surprise because it is unusual for building societies to take over banks, and because Nationwide has rapidly expanded in recent years, taking over the rival building societies Portman, Dunfermline, Derbyshire and Cheshire.
A source close to the Swindon-based society said executives were closely watching the sales process after Santander pulled out following two years of negotiations.
RBS, 81% owned by the taxpayer, must sell the branches by the end of next year to meet rules set out by Brussels when the bank was bailed out with £45bn of taxpayer funds. The RBS chief executive, Stephen Hester, is expected to approach policymakers in Brussels for an extension of the timetable, and there is speculation that the bank might try to convince Europe that it should no longer need to sell them off.
Sir Richard Branson’s Virgin Money, which bought Northern Rock at the start of the year, and the venture capitalist JC Flowers may also be interested in the RBS branches.
Santander, which had wanted the branches to expand its presence in small business banking, blamed computer glitches for its decision to back away from a deal that was first announced in August 2010. Santander’s UK arm agreed the £1.6bn purchase when it was run by António Horta-Osório, who is now boss of Lloyds Banking Group.
Lloyds is in the throes of disposing of 632 of its branches to the Co-operative Bank, again because of rules set out by Brussels after its £20bn bailout. Negotiations are continuing about moving 4.8 million Lloyds customers to the Co-op, which would have 974 branches once the deal completes. Nationwide has 800 branches and outlets.
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