Royal Bank of Scotland Group, Britain’s largest taxpayer-owned bank, faces an in-depth European Union review into whether a new plan to satisfy the conditions of its bailout is equivalent to selling its Williams & Glyn unit.
The alternative plan, which includes the bank helping to fund its competitors in small-business lending, contains “novel behavioral measures, the effect of which is difficult to quantify,” the European Commission said Tuesday in a statement. The EU competition regulator said interested third parties have one month to submit comments.
RBS failed to sell Williams & Glyn, which was required as part of its 2009 bailout to increase competition in lending to small and medium-sized enterprises, amid issues in separating the unit’s technology platform. Instead, the U.K. offered an alternative package in February that has an estimated upfront cost for RBS of about $934 million and forces the bank to help its rivals poach clients from it.
“We can only accept this proposal if it has the same positive effect on competition as the divestment of Williams & Glyn would have had,” EU Competition Commissioner Margrethe Vestager said in the statement. “This is important for fair competition.”
Full Content: Bloomberg
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