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March 8, 2010

RBS branch sale hit by funding gap

by Gill Montia

Story link: RBS branch sale hit by funding gap

A funding gap of around £2 billion could halt RBS’s proposed sale of 320 branches, The Sunday Times has reported.

According to the newspaper, a problem has emerged because the loan books of the branches in question are being supported by the Bank of England, and a prospective buyer would need to be in a position to replace the facility.

A Sunday Times breakdown reveals that the branches for sale have lent around £24 billion in total: around £7 billion to retail customers, £12 billion to small businesses, and the balance made up of larger business loans.

The 84% state-owned bank needs to sell the network to appease the European Commission, which has been keeping a close eye competition issues since RBS’s rescue by the British taxpayer.

Virgin Money and National Australia Bank had been tipped as bidders.

 

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