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NAB To Conduct Due Diligence On RBS Branch Network
Troubled British lender Royal Bank of Scotland, which is nearly 80 per cent owned by the UK government, has set a deadline for the middle of June to receive final bids for a 318 strong UK branch network that it has put up for sale, at the behest of the European Union.
According to a report in the Australian, which cited an unnamed source familiar with the negotiations, due diligence by the potential suitors including National Australia Bank (NAB) and Spain’s Banco Santander should take place within the next two or three weeks.
The source added that Spain’s Banco Bilbao Vizcaya Argentaria has also tabled a bid, but is using it more as means of obtaining more information on the UK banking market, which is expected to undergo serious consolidation during the next year, rather than as a serious bid.
A deal is widely expected before the year is out, whilst the actual transfer of the branch network will occur in 2011.
There are five companies which made initial bids, including Virgin Money, a financial services company owned by Richard Branson, and a consortium bid that includes private equity firm Blackstone Group, and the Wellcome Trust, a UK charity.
The bids range between £1.5 billion and£2 billion, and according to the unnamed sources, the bids have been rejected for being to low.
RBS is currently 83 per cent owned by the British government, and is selling a branch network that spans the UK under European Union guidelines for receiving a government bailout, the deal will include the accounts of some SME customers in the UK.
Combined, the branches have £23.6 billion in assets and 6000 employees.
RBS received the largest banking bailout in the world following its near collapse at the height of the global financial crisis in 2008.
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