Santander has pulled out of the purchase of 316 RBS and NatWest branches, leaving the bank under pressure to find another buyer
What is happening with RBS?
In late-2009 Lloyds TSB and Royal Bank of Scotland (RBS), which both received money from the government to help them survive the credit crunch, agreed to sell off some of their assets to boost competition in the banking market.
Lloyds Banking Group agreed to sell 632 branches to the Co-operative Group, while Santander was to buy all 311 of RBS’s branches in England and Wales, as well as its five NatWest branches in Scotland.
Combined, those 316 branches service about 1.8 million customers, but today it emerged Santander had pulled out of the sale.
What will happen to the branches now?
RBS said it will “commence a new process of disposal”, meaning a new buyer will have to be found. There is speculation that despite pressure from the European regulators to sell, RBS may try to keep the 316 branches by arguing that the UK retail banking market is already open to more competition at a time when the economy has deteriorated.
What does this mean for my RBS bank account?
It’s business as usual. The branches will stay open while a new buyer is found and you will still be able to use telephone and internet banking systems. RBS chief executive, Stephen Hester, says: “I can assure all affected customers that there will be no disruption to the service they receive. It is business as usual in all of these branches, and customers don’t need to take any action.”
So do I have to do anything?
No. It is up to RBS to work towards the sale while minimising impact for its customers. In order to do so it has firstly separated the 316 branches from the rest of RBS, and more than 98% of those customers have been moved to new sort codes and account numbers, while new debit and credit cards have been issued to all customers. This will help make the process smoother when the sale eventually takes place.
Branch staff can answer questions, or customers can call a dedicated call centre number (0800 210 0214, 8am to 8pm Monday to Friday and 10am to 4pm weekends and bank holidays).
Who are the likely contenders to buy the branches?
Richard Branson’s Virgin Money, which took over Northern Rock at the start of the year, and venture capitalist JC Flowers are among those expected to bid.
Will I have to become a Virgin Money customer?
No one can force you to become a Virgin Money customer, but because every branch in England and Wales is being sold the only way to stay with RBS is to switch to a Scottish branch and bank online or by phone. You can keep within the RBS group by moving to a NatWest account.
What if I have RBS shares?
RBS shares fell 3% on Monday morning as analysts warned that the bailed out bank will have to accept a lower price for the branches it had hoped to sell to Santander. They later recovered to 269p, down about 1%.
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