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Virgin eyes RBS branch sale

Virgin Money is being heavily linked to a bid for the network of Royal Bank of Scotland branches that failed to be bought by Santander.

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Virgin linked to RBS branch sale

Virgin Money is being heavily linked to a bid for the network of Royal Bank of Scotland branches that failed to be bought by Santander.

The Sir Richard Branson-backed bank, which took control of nationalised Northern Rock in January, was said to have been "very keen" on the business when it was up for sale in 2010 and is now considering the opportunity to rebid.

Buying the RBS division would more than quadruple Virgin's branch network and add a small and medium-sized business bank to its offering.

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Virgin 'very interested' in looking at RBS portfolio, says source

Virgin Money, the UK financial services firm that last year bought Northern Rock, would be "very interested" in taking a look at a portfolio of 316 branches that Royal Bank of Scotland has put back up for sale, a source said.

The source said Virgin Money is keen to grow further after the Northern Rock deal and would take a look at the business on offer, but whether it would pursue a deal would depend on issues like integration prospects and price.

Santander on Friday pulled out of the £1.65 billion ($2.65 billion) deal to buy the RBS branches, which come with 1.8 million customers, more than two years after it was struck, blaming delays in its completion.

Job fears after RBS deal collapse

Thousands of workers are facing mounting uncertainty over their jobs after the collapse of a proposed sale of Royal Bank of Scotland branches to Spanish banking giant Santander, it warned.

Unite called on the government to press the European Commission to lift its requirement for RBS to sell 316 branches and other assets.

Gail Cartmail, Unite's assistant general secretary, said:

This latest development is causing yet more uncertainty and represents another day of chaos for loyal RBS staff.

"The real danger is that the European Commission's requirement to sell branches and assets by the end of 2013 will result in a fire sale and an attempt by any buyer to strip out costs and drive down terms and conditions of hard working staff.

"At the very least the commission should give RBS more time to ensure that a buyer is found which is good for the taxpayer and the economy, right for competition and above all right for staff, their terms and conditions, job security and future."

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RBS chief: Santander deal collapse 'disappointing'

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. While this is a profitable part of our business that we would rather not part with, RBS has worked hard to ensure it is substantially separate from our UK branch network and corporate business and largely ready to be taken on by a new owner.

Much of the heavy lifting associated with a transfer has already been completed, including separating data for 1.8 million customers and putting in place a standalone management team.

It is of course disappointing that Santander decided to pull out of this transaction, especially for the customers and staff involved. However, RBS’s strong progress in our restructuring plans means we can continue to provide a stable home for this business and its customers pending a further resolution.

RBS will commence a new process of disposal and will provide a further update on this in due course.

– Stephen Hester, RBS Group Chief Executive

Details on the Santander and RBS deal

  • Royal Bank of Scotland planned to sell 316 branches to Santander.
  • That included 311 branches in England and Wales and five NatWest branches in Scotland.
  • The deal was announced in August 2010 and was expected to be completed at the end of 2011.
  • The sale had been ordered by the European Commission after a state rescue for RBS.
  • Santander reportedly paid £1.65 billion for the RBS deal.
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