Royal Bank of Scotland mulls sale of 300 branches

Royal Bank of Scotland (RBS) is considering a hybrid sale of more than 300 branches to private equity firms and institutional investors, according to reports published Tuesday.

Royal Bank of Scotland (RBS) is considering a hybrid sale of more than 300 branches to private equity firms and institutional investors, according to reports published Tuesday.

The bank is devising plans to sell a minority stake in the branch network to an outside investor before trying to list the business on the stock market, sources told Sky News.

The move is part of the state-owned lender's attempts to start-up the flagging auction.

One or more private equity firms interested in acquiring the branches could buy about a 20% holding in the business under the proposal. Among the firms said to be keen to invest are Apollo Management and JC Flowers.

The deal would bring RBS another step further to selling the entire branch network, which was meant to be completed by the end of the year under an agreement with the European Commission.

The network, which includes branches in England and Scotland, must be sold as part of the bank's £45bn taxpayer bailout fund issued in 2008.

RBS is expected to announce the deal when it releases its full-year results next week.

The news follows reports a group of institutions including Schroders and Threadneedle Investments were planning to make an offer for the branches.

A deal would be in line with the bank's latest possible plans, people familiar with the situation are reported to have said.

RBS was to sell the branch network to Santander UK, but the deal fell through last year amid recriminations about the state of the branches' associated IT systems.

Prime Minister David Cameron said he would like the bank to fast-track reforms as the government prepares to dispose of its interest.

RD

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