Wednesday 7 December 2016

Bid for RBS unit links veterans of Irish Crash

Published 27/10/2016 | 02:30

David Duffy, former ceo of AIB
David Duffy, former ceo of AIB

Britain's Clydesdale Bank has said it made an offer to buy Williams & Glyn, the business Royal Bank of Scotland (RBS) must sell under European state aid rules.

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The move by Glasgow-based Clydesdale could end a costly seven-year process by RBS to offload Williams & Glyn, after it was ordered by the European Union to sell it as a condition of its taxpayer-funded rescue at the peak of the global financial crisis.

A deal would bring together two of the most senior bankers who worked through the clean up after the Irish Crash.

Clydesdale is headed by the former AIB chief executive David Duffy (inset) who led a turnaround of the bank after it had been nationalised.

Meanwhile, the former Ulster Bank chief executive Jim Brown heads Williams & Glyn, having moved from one RBS unit to the other after overseeing the Irish arm's return to profit.

Since taking the helm at Clydesdale in June 2015, Mr Duffy has overseen its demerger from parent group National Australia Bank (NAB) and a stock market listing of 25pc of its shares in London and Sydney.

The bank trades under the Clydesdale and Yorkshire bank brands in Scotland and England. Mr Duffy said as early as last February that he would run the rule over Williams & Glyn as he looks to build scale in the UK market.

The pressure on RBS to cut a deal to sell Williams & Glyn has ramped up after Spain's Banco Santander called off discussions last month. The business must be sold by the end of next year.

"We continue to explore options in meeting our obligations to the European Commission," RBS said in a statement. "We have been clear that there is interest in the business and this remains the case."

Clydesdale said that discussions with RBS are ongoing, and there is no certainty that any transaction will occur.

"A transaction will only be pursued if it is determined by the board to be in the best interests of [Clydesdale] shareholders," the bank said.

European regulators originally ordered a sale of Williams & Glyn by 2013 to prevent RBS, Britain's largest small-business lender, from having an unfair advantage and posing a systemic threat to its economy.

RBS has blamed the complexities of creating a technology platform for the delays in selling Williams & Glyn.

Santander pulled out of talks last month over the price, sources said. A planned stock market listing was also abandoned. Despite difficulties in splitting it out from RBS, Williams & Glyn has 1.8million customers, net loans and advances of £20bn and customer deposits of £24bn, making it one of Britain's largest prospective 'challenger' bank brands.

Meanwhile, another veteran of the post-Crash banking market, Permanent TSB chairman Alan Cook, will retire from the board on March 31 at the end of his six-year term. He was appointed to the board of what was then Irish Life & Permanent (IL&P), and oversaw the separation and sale of Irish Life and a subsequent relaunch of the bank. (Additional reporting by Reuters)

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