Banks

RBS share drop accelerates on stress test flop

Stressed. Shares in Royal Bank of Scotland have accelerated their losses this morning, falling over 4.5 per cent after the state-backed lender came in bottom of the heap in the Bank of England’s latest stress tests. RBS failed the toughest ever stress tests carried out by the BoE, with results this morning showing the lender’s […]

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Currencies

Renminbi strengthens further despite gains by dollar

The renminbi on track for a fourth day of firming against the dollar on Wednesday after China’s central bank once again pushed the currency’s trading band (marginally) stronger. The onshore exchange rate (CNY) for the reniminbi was 0.28 per cent stronger at Rmb6.8855 in afternoon trade, bringing it 0.53 per cent firmer since it last […]

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Financial

Sales in Rocket Internet’s portfolio companies rise 30%

Revenues at Rocket Internet rose strongly at its portfolio companies in the first nine months of the year as the German tech group said it was making strides on the “path towards profitability”. Sales at its main companies increased 30.6 per cent to €1.58bn while losses narrowed. Rocket said the adjusted margin for earnings before […]

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Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

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Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

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Categorized | Banks

Santander pulls out of Williams & Glyn talks


Posted on September 20, 2016

A man walks past a branch of The Royal Bank of Scotland (RBS) in central London, Britain August 27, 2014. REUTERS/Toby Melville/File Photo©Reuters

    Santander has pulled out of talks with Royal Bank of Scotland to acquire Williams & Glyn in a blow to the state-backed lender’s attempts to offload the challenger bank.

    The Spanish bank submitted a formal offer to buy the 300 Williams & Glyn branches from RBS last month, bankers told the Financial Times.

    But Santander has now dropped the acquisition negotiations, according to two people briefed on the process. One person said this was because of price disagreements, noting that Williams & Glyn was originally valued at about £1.9bn.

    The latest twist is a significant setback for RBS, which is 73 per cent-owned by the UK government, after it has spent seven years and £1.5bn attempting to separate itself from Williams & Glyn.

    RBS must divest Williams & Glyn by the end of 2017 as a condition of European Commission rules for receiving a £45bn bailout during the financial crisis. Ross McEwan, chief executive of RBS, has said in the past that offloading Williams & Glyn is a precondition for returning excess capital and dividends to investors.

    OakNorth in profit after 1 year

    Rishi Khosla, CEO of Oaknorth, photographed for business life at his home in Kensington this afternoon.

    OakNorth, a UK challenger bank that focuses on lending to small businesses, has broken even in its first year in a sign of strength among the wave of recent digital-only entrants to the British banking market.

    RBS is understood to be in discussions with the Treasury about ways it could meet the commission’s criteria. A person close to the plans said that Clydesdale and Yorkshire Banking Group, a challenger bank, is eyeing the Williams & Glyn branches.

    Mr McEwan highlighted last month that the aim of the divestment is to remedy competition concerns in the concentrated UK SME market.

    RBS said at the end of last year it would pursue plans to list Williams & Glyn on the stock exchange as a standalone bank, but had also entered early-stage talks with parties interested in a potential acquisition.

    However, RBS abandoned plans to create Williams & Glyn as a separate bank with its own IT system and licence last month, pointing to the lower for longer interest rate environment and the impact this would have on creating a profitable bank in the future.

    The latest attempt by Santander comes after it abandoned a £1.65bn deal to buy Williams & Glyn in 2012, ostensibly because of IT complications relating to the separation of the branches.

    Atom attracts early interest

    Atom Bank, the UK’s first app-based bank, has registered nearly 40,000 potential customers of which only 2,000 have opened accounts, in an early sign of the challenges start-ups face as they attempt to exploit the shift to mobile banking.

    One person close to Santander suggested there could be room to come back to the table, saying: “At the right price, we’ll do the transaction”.

    RBS’s task has proved tougher than other bank carve-outs, such as Lloyds Banking Group hiving off TSB, analysts have said. RBS had the dual challenge of building new technology — whereas Lloyds Banking Group allows TSB to “piggyback” off its own systems — and of creating a more complicated bank, by focusing on both retail and SME customers.

    One adviser, who wished to remain anonymous, said: “It is tough to buy Williams & Glyn because it’s still impossible to pull it out of the bank [RBS], and is difficult to value post Brexit.”

    The Treasury, Santander and RBS declined to comment.