Branson Kicked Out Of RBS Auction
The timing of Royal Bank of Scotland's decision to kick Sir Richard Branson's Virgin Money out of the auction of 300-plus bank branches is intriguing.
Earlier today, RBS's advisers at the investment bank UBS informed Virgin Money that its offer was no longer being considered. According to people familiar with the process, RBS had decided that the branches sale was sufficiently complex already without offloading the business to a buyer without much in the way of phyical bank infrastructure.
What did count in Virgin Money's money favour, though, was that it made a series of pledges relating to job and branch preservation and the fact that it's among a new breed of aspiring providers of retail banking services to the British public, something ministers have been at pains to promote. So you might say, given the politicisation of the banking industry, that it's convenient that RBS's decision came the day after (as opposed to before) a general election.
Virgin Money's elimination leaves BBVA, National Australia Bank (NAB) and Santander in the process. A decision on the eventual buyer is unlikely for some weeks yet.
NAB and Santander have significant retail banking operations already, so it seems inevitable that one of them will ultimately prevail.
It's hardly at the top of the Government's agenda right now, but it's hard to interpret this decision as anything other than a loosening of the political commitment to encourage the development of a new generation of high street banks in Britain.
Posted on 07 May 2010 by W