Nationwide Linked to RBS Branch Takeover

Posted on 27 October, 2012 by MOVEHUT

Nationwide Building Society is considering making an offer for the 316 branches that Royal Bank of Scotland was due to sell to Santander.

According to the Sunday Times, the mutual is looking at an offer as speculation mounts over which companies will bid following the collapse of the deal with Spanish-owned Santander UK.

The interest of the UK’s largest building society will come as a shock because it is rare for building societies to take over banks, and because Nationwide has expanded rapidly in recent years, taking over the rival building societies Dunfermline, Cheshire and Derbyshire. Nationwide has a total of 800 branches and outlets.

RBS had planned to sell the properties, which feature 40 banking centres for small and medium sized businesses and 316 branches, to Santander in a deal agreed by the European Commission as a condition of receiving state aid.

Santander agreed in August 2010 to buy the properties; however it pulled out earlier this month as it became evident a revised target for the purchase to be finalised by the end of the year would not be reached, with the group also blaming the complications of RBS’s technology platform.

Virgin Money has too been linked to a bid for the RBS branches that were due to be sold to Santander. The Sir Richard Branson-backed bank, which took control of state-owned Northern Rock in January, was said to have been “very keen” on the company when it was up for sale in 2010 and has in fact expressed an interest in re-bidding.

Other likely suitors are thought to include buyout firm NBNK and US private equity firm JC Flowers.

Santander is expected to face questions over its decision to pull out from the deal when it reports its third quarter figures.

Stephen Hester, RBS chief executive guaranteed there would be “no disruption” for customers and said the taxpayer-backed bank would start a process to seek a new buyer, having already made provisions for transfer of the branches to a new owner.

Furthermore state-backed RBS is also reportedly planning to spend £80m on improving its computer systems following the embarrassing failure in June that caused disruption to 12 million personal and business customers.

Lloyds is also going through the painful struggle of disposing of 632 of its branches to the Co-operative Bank, again because of rules set out by Brussels after its £20bn bailout. Discussions are continuing about moving 4.8 million Lloyd’s customers to the Co-op, which would have 974 branches once the deal is completed.

Meanwhile Royal Bank of Scotland has reported it will launch a £1.5 million fund to increase the number of women starting a business.

Over the next three years RBS will supply ten grants of up to £50,000 a year each to businesses with committed enterprise programmes’ working to boost female start-ups.

The Inspiring Women in Enterprise programme is part of a wide RBS Group initiative called Inspiring Enterprises, which looks to develop entrepreneurship among the young and increase the number of social enterprises.

The bank will issue a report that shows the amount of self-employment among women has consistently stayed at half that of men.

In 2011, just over 10 per cent of men were in the early stages of starting up a business compared with just 5 per cent of women.

Chief executive officer of RBS corporate banking, Chris Sullivan, said: “We want to unlock the huge economic potential of women and remove the barriers that stand in their way when it comes to setting up a business.”

Applications for funding will be open two times a year. The first round ends on November 2.

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