Yahoo Finance Richard Branson Renews Interest In RBS
Sir Richard Branson's banking arm has made a swift approach to swallow up more than 300 branches at the centre of an escalating row between Royal Bank of Scotland (LSE: RBS.L - news) (RBS) and Santander UK.
I have learned that Virgin Money has approached the state-backed RBS in the last 24 hours to express an interest in buying 316 branches that must be sold under orders from the European Commission.
Virgin's interest will provide a glimmer of hope to RBS that it may yet be able to secure a sale ahead of a Brussels-imposed deadline of the end of 2013.
Santander UK's purchase of the business for £1.65bn, which had already been the subject of several rounds of re-negotiation, collapsed on Friday night amid acrimony.
The Spanish-owned bank said it was pulling out of the deal amid problems with the network's IT systems, while RBS suggested that they provided a convenient excuse to withdraw amid the banking industry's torrid operating environment.
A deal would be far from straightforward for Virgin Money, which last year agreed to take Northern Rock off the hands of British taxpayers.
The RBS branch network requires billions of pounds of capital to be allocated to it for regulatory purposes, and Virgin Money may struggle to convince investors that it can do that while also focusing on the integration of Northern Rock.
NBNK Investments (LSE: NBNK.L - news) , a vehicle set up to buy assets from state-backed banks, would be a logical contender to bid for the RBS branches but is in the process of being wound up following its failure to buy a chunk of Lloyds Banking Group (LSE: LLOY.L - news) earlier this year.
The collapse of the sale to Santander UK is not RBS's only headache.
As I revealed last weekend, the Edinburgh (LSE: EUS.L - news) -based bank is also involved in a tussle with the Treasury over the concessions it must make in order to escape the clutches of a giant state insurance scheme.
Virgin Money and RBS declined to comment.
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