Royal bank of Scotland's divestment of of Williams & Glyn
In May 2015 the government asked the Competition and Markets Authority to assess the likely impact of the latest proposals for the divestment of Williams & Glyn for competition in the UK banking sector.
Update: 16 December 2015
The government is committed to achieving a strong and diverse banking sector to benefit UK customers. HM Treasury previously asked the Competition and Markets Authority (CMA) to assess the likely impact of the latest proposals for the divestment of Williams & Glyn for competition in the UK banking sector.
The divestment of Williams & Glyn represents a great opportunity to improve competition in banking, in particular in the small business banking sector. The divestment is another step in the government’s plan to improve competition in banking that gives real choice to retail and small business customers and supports the wider economy.
The Williams & Glyn business consists of 307 bank branches in the UK, including the RBS branches in England and Wales, and NatWest branches in Scotland. The government expects Williams & Glyn to be able to act as a strong competitive challenger to the incumbent banks.
RBS has told us that they have received informal approaches for the business, so they will now launch a trade sale process in H1 2016, and have told us that they will be able to complete the sale by end 2017. RBS are committed to divesting of W&G as soon as possible, in a way that ensures a smooth transition for customers and delivers value for taxpayers, within the mandated deadlines of the State aid agreement with the European Commission.
In light of RBS’s decision to launch a trade sale process, which would be likely to raise different issues from an IPO depending on the identity of a buyer and which would be subject to merger control as appropriate, we have asked the CMA to suspend its work on the review for now.
Update: 24 July 2015
The Treasury previously asked the Competition and Markets Authority (CMA) to assess the likely impact of the latest proposals for the divestment of Williams & Glyn for competition in the UK banking sector.
At this stage, Williams and Glyn’s business plan has not yet been finalised and it is not possible for the Competition and Markets Authority (CMA) to conclude its advice until the Prudential Regulation Authority (PRA) has had the opportunity to examine this plan. We have therefore asked the CMA to delay finalising its advice until later in the year.
The government has today (28 May 2015) asked the Competition and Markets Authority (CMA) to assess the likely impact of the latest proposals for the divestment of Williams & Glyn for competition in the UK banking sector, in order for the government and RBS to identify if more could be done.
The divestment of Williams & Glyn represents an opportunity to improve competition in the small business banking sector, and today’s announcement is another step in the government’s long term plan to improve competition in banking, and create a banking sector that gives real choice to retail and small business customers and supports the wider economy.
The Williams & Glyn business consists of 307 bank branches in the UK, including the RBS branches in England and Wales, and NatWest branches in Scotland. The government expects Williams & Glyn to be able to act as a strong competitive challenger to the incumbent banks, which is the basis for the government today asking for the CMA’s view.
As part of its role in deciding whether to authorise Williams & Glyn, the PRA will also assess whether the bank has a viable and sustainable business model.
In addition to the work being undertaken by the PRA, the government is asking the CMA to assess the likely impact on competition of the new bank, taking account of changes made to its business plan and shape and preliminary feedback from the PRA.
The CMA will report its findings in July 2015. HM Treasury and RBS will then consider the CMA’s findings and agree appropriate next steps.
Under the terms of the revised State aid decision by the European Commission of April 2014, in return for the support which RBS received from HM Treasury in 2008 and 2009, RBS is required to divest the Williams & Glyn business by 31 December 2017. This review will not alter the current divestment timetable and RBS is committed to divesting the Williams & Glyn business by 31 December 2017.
Last updated 16 December 2015 + show all updates
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Update - launching trade sale process for Williams & Glyn in H1 2016
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Update on the Competition and Markets Authority's assessment of Williams & Glyn divestment proposal.
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First published.