European Union examining new proposed plans for Royal Bank of Scotland
- Author: Zachary Reyes Apr 05, 2017,
Apr 05, 2017, 17:31
Paul Fox, managing director of retail and business banking at W&G, will step up to replace Mr Brown, the memo said, with the business continuing to be run as a separate franchise.
RBS had been looking to sell off around 300 Williams & Glyn branches, or float the business on the stock market, to meet European Union rules on bank bailouts following its rescue at the height of the financial crisis. The Commission is now seeking the views of all interested parties on an alternative package proposed by the United Kingdom to replace RBS's commitment to divest Williams & Glyn. "This is important for fair competition", European Competition Commissioner Margrethe Vestager said in a statement.
However, RBS admitted in February that none of the proposals to acquire Williams & Glyn could achieve a full separation and divestment before the 31 December 2017 deadline. So far the successive divestment attempts have not been successful. The move comes after the bailed-out lender scrapped a plan to sell the division, having hit a series of setbacks in the process.
Last year RBS gave up after failing finding a buyer for the branches, amid huge technological complications and rock-bottom interest rates.
For these reasons, the United Kingdom authorities are seeking to amend the commitment to divest Williams & Glyn, by substituting it with an alternative package.
The Treasury said its alternative package for RBS, if accepted by the EC, would even out the distortion in the UK's SME banking market resulting from the state aid to RBS, with greater speed and certainty than would the divestment of Williams & Glyn.
According to the United Kingdom authorities, the alternative package, if accepted by the Commission, would remedy the distortion in the UK's SME banking market resulting from the state aid to RBS, with greater speed and certainty than would the divestment of Williams & Glyn.
EC rules for state aid mean it can only accept such modifications if they are considered truly equivalent to those originally provided.
The Royal Bank plan, put forward by the Treasury for approval by the European Commission, is seen as so unusual that it is hard to know how or whether it would work.
The EU competition regulator said interested third parties have one month to submit comments.
"This opening of an investigation does not prejudge its outcome", the EC stressed.
RBS is one of Europe's largest financial services groups.
The UK government now holds 71.3 per cent of RBS shares.