Nationwide confirms interest in RBS branches

| November 27, 2012
Nationwide confirms interest in RBS branches

Nationwide Building Society, Britain’s biggest mutual lender, has told Reuters news agency that it is interested in purchasing the portfolio of branches being sold by Royal Bank of Scotland.

The acquisition would support Nationwide’s plan to start lending to small and medium-sized enterprises.

Speaking to Reuters, Nationwide’s chief executive Graham Beale said: “Strategically we want to enter into the SME space.

“If there is anything I could do that would accelerate our strategy it would be of interest.

“Within that context, RBS is something which we will watch very carefully.”

RBS had been in long-standing talks with Santander over a £1.65bn deal for the branches, but the Spanish bank ended negotiations in August after the sale process became more complex and long-winded than expected.

RBS must sell the branches under European rules governing the £45 billion state bailout it received during the 2008 financial crisis.

Virgin Money, US private equity firm JC Flowers, Corsair Capital and a joint venture between Blackstone and Anacap, are also believed to be interested in bidding for the portfolio.

RBS has sent new sales documents to prospective buyers, and a shortlist of two could be drawn up by the end of the year.

If RBS fails to sell the branches it is planning a stock market listing of the business.

There is speculation that RBS’s outdated computer systems could deter Nationwide from buying the branches.

Concern over the quality of the technology is believed to be one of the factors in Santander’s decision to pull out of its deal with RBS.

Bidders for the branch portfolio are expected to use concerns about the computer systems as a bargaining tool, which could force RBS to sell the branches at a lower than expected price.

Although RBS has invested £4 billion in upgrading its computer systems, a glitch this summer caused major disruption to NatWest and Ulster Bank customers, which lasted for weeks.

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