RBS share price: Group continues to struggle to offload W&G branches

on Nov 28, 2016
Updated: Oct 21, 2019

Royal Bank of Scotland Group (LON:RBS) is facing another setback in offloading its Williams & Glyn branches, with potential buyer Clydesdale and Yorkshire bank looking to leave behind the more risky or less attractive bits, The Telegraph has revealed. The FTSE 100 lender is required by the European Commission to divest the branches as a condition of its taxpayer-funded bailout during the financial crisis.

RBS’ share price has fallen deep into the red in London this morning, having shed 2.23 percent to 197.00p as of 08:27 GMT, underperforming the benchmark FTSE 100 index which is currently 0.91 percent worse off at 6,778.50 points. The lender’s shares have lost more than a third of their value this year, as compared with an 8.6-percent rise in the Footsie.
The Telegraph reported over the weekend that senior bankers had said that Clydesdale, which has signalled interest in RBS’ Williams & Glyn branches, was trying to use the FTSE 100 group’s increasingly weak bargaining position to leave behind the parts of the bank it does not want. The suitor is understood to have proposed leaving some of W&G’s corporate bank, which includes its SME customers as well as some of its branches.

RBS, which has been ordered to sell a network of 314 branches under the W&G brand as a condition of its £45.5-billion taxpayer-funded rescue, has been looking to offload the unit for about seven years, suffering multiple delays, which have cost it about £1.5 billion. The Telegraph notes that the Treasury is in talks with Brussels about how to ensure a successful deal for W&G, with a source saying that the discussions included potential sanctions against RBS for missing the deadline.
Chancellor of the Exchequer Philip Hammond meanwhile has signalled that the government, which still holds about 70 percent in the FTSE 100 group, would not cut its stake until both RBS’ problems with Williams & Glyn and a potential fine in the US are resolved.
As of 09:01 GMT, Monday, 28 November, Royal Bank of Scotland Group share price is 202.40p.

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