RBS begs for more time to sell UK branches

The state-controlled bank posts £5.17bn pre-tax loss in 2012

New Statesman
Photograph: Getty Images.

The Royal Bank of Scotland (RBS) has informally requested the European Commission (EC) to extend time until the end of 2013 to complete sales of its more than 300 branches.

In its request, the British bank said the commission that it recorded a £5.17bn pre-tax loss in 2012 due to a series of scams and confirmed its plans to carry out a partial flotation of its US bank, Citizens. In addition, the bank also said it was converting its branches into a standalone business that could be floated or sold eventually to a trade buyer.

A planned sale to Spain’s Santander worth £1.65bn fell apart in October 2012.

Stephen Hester, CEO of RBS, said: “There aren’t a lot of buyers for UK banks right now. I think that will change over time.”

RBS has now set aside £2.2bn to resolve its share of the industry-wide scandal apart from an extra £650m at the end of 2013 for its mis-sold interest rate hedging products.

The group paid £381m to the US and UK regulators for the settlement of the Libor rate-rigging scandal. “The group continues to co-operate with other bodies in this regard and expects it will incur some additional financial penalties,” the bank said.

The bank has to sell its more than 300 UK branches as a condition of the commission’s endorsement of its rescue by the UK government.

Meanwhile, RBS shares fell by 2.3 per cent to 338.8p.