Royal Bank of Scotland branch sales under threat

In a move which is certain to limit the number of companies potentially interested in the 318 Royal Bank of Scotland branches up for sale, it has been revealed that prospective buyers will need to find additional funding of £2 billion to support the loan book attached to the business. While there has been speculation that a number of newcomers to the UK market will emerge, the additional funding requirement would seem to suggest only larger more well-established institutions will join the race for the branch network.

It has also been revealed that an additional £3 billion in emergency funding for the branch network has been provided by the Bank of England although it is likely this particular issue will have been addressed before the sale deadline of 2013. The UK government had initially hoped that a sale of part of the branch networks of Royal Bank of Scotland and Lloyds bank would inject more competition into the UK banking arena but it would appear these hopes are fading.

A number of prominent names have been mentioned with regards to a potential acquisition of both the Royal Bank of Scotland and Lloyds bank branch networks for sale but this additional funding requirement may well see some companies reconsider their position.