Royal Bank of Scotland Group (LON:RBS) is facing another challenge with small lenders set to oppose the bank’s alternative Williams & Glyn plan which will allow the company to avoid the sale of the unit, a condition of its taxpayer-funded bailout. The news comes after Brussels recently said that it would investigate the alternative proposal.
RBS’ share price has fallen deep into the red in London this morning, having shed 1.84 percent to 224.20p as of 09:10 BST, slightly underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.03 percent lower at 7,252.11 points. The group’s shares have lost more than five percent of their value over the past year, and are down by 0.2 percent in the year-to-date.
The Times reported this morning that challenger banks, including CYBG and Secure Trust Bank, were preparing to write to the European Commission objecting RBS’ alternative plan to the W&G sale which would enable the bailed-out lender to avoid offloading the branches. The lenders argue that the plan, which has the blessing of the Treasury and envisages the creation of £750 million of measures to boost small business lending, does not go far enough.
The challenger banks are understood to be preparing to submit evidence to the Commission’s investigation into the FTSE 100 group’s plan, demanding that the bank be forced to sell off billions of pounds of loan portfolios, as well as seeking stricter provisions over access to services. The news comes after Brussels warned last week that the £750-million plan could ultimately double to £1.5 billion.
A spokesman for the Treasury told The Times that “RBS must deliver on its remaining state aid commitments and the new plan being consulted on by the European Commission represents the most effective way of delivering the pro-competition objectives behind them”.