RBS scraps W&G carve out; writes off £345 million spend on spin off

RBS scraps W&G carve out; writes off £345 million spend on spin off

Santander is in the frame to take over the 300-strong rebranded Williams & Glynn branch network from Royal Bank of Scotland, after the taxpayer-owned bank scrapped plans to develop a new banking platform for the operation, citing high costs and risks.

RBS' decision to abort the planned carve out of W&G came as the bank reported a mammoth £2 billion half year loss as it struggled to deal with legacy issues from its 2008 bail out.

Santander is understood to have revived its interest in acquiring the W&G franchise after a previous attempt fell apart due to significant IT integration challenges. RBS has since spent hundreds of millions of pounds trying to create a cloned banking platform for the spin off, which would rank as the UK's seventh-largest bank, with about 1.7 million retail banking customers and a personal current accounts market share of approximately two percent.

RBS has written off £345 million in seperation costs in its half-year results presentation, admitting that the IT challenges inherent in its plans have been overwhelming.

Says the statement: "Due to the complexities of Williams & Glyn's separation, whilst good progress has been made on the programme to create a cloned banking platform, the Board concluded that the risks and costs inherent in the programme are such that it would not be prudent to continue with this programme."

Any sell-off would likely take the form of an asset transfer, similar to that deployed by Lloyds Bank when it offloaded TSB, involving a transitional services agreement between RBS and any future owner.

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