W&G Investments launches bid for RBS branches

Consortium of City funds including Schroders, Threadneedle and Lansdowne Partners floats with the aim of raising £15m

A group of City investors and pension funds have called for a return to "simple banking" as they launch a bid to take over more than 300 branches put up for sale by Royal Bank of Scotland.

W&G Investments, a consortium of City funds, is to file its official offer today to take over the 315 branches that RBS is being forced to sell off by Brussels as a condition for approving the bank's £45bn taxpayer bailout at the height of the banking crisis.

The consortium is a roll call of more than a dozen blue-blood City names, including Schroders, Threadneedle and Lansdowne Partners, and floats on the London stock exchange today with the aim of raising £15m to fund its bid.

RBS has already received two rival offers for the branches, which have 1.7 million retail customers and 230,000 small and medium-sized business accounts. One is from a consortium backed by the Church of England that is promising "ethical" investments; another is promoted by private equity firms AnaCap and Blackstone.

Royal Bank of Scotland has now received three bids for the 315 branches it is being forced to sell under EU rulesThe bank is expected to announce its decision in the next few weeks, but could reject all three bids and float the branches as a standalone company on the stock exchange.

The head of W&G Investments, former Tesco finance director Andrew Higginson, said the consortium, with £20bn of assets, was big enough to be the "challenger bank" needed to inject more competition into the UK banking sector.

"We are taking a long-term view about building a genuine challenger bank," he said. "These institutions want a simple banking business that takes deposits in from its customers and lends them out to others and makes a good margin in the middle."

The bank's customers should not necessarily expect the cheapest products, because that was what went wrong during the financial crisis, he said. "There is no great eureka magic formula. It is just a question of behaving well and doing the right thing for them [the customers]."

The group has offered £1.1bn up front, rising to £1.5bn once the branches are formally separated from RBS. The W&G investors would get a £55m payout from the state-backed lender even before the branches were sold, according to the stock market prospectus. Higginson said this was "a very, very low rate of interest" for the risk any investors would be taking on. "We are giving [RBS] £1.1bn on day one and we are getting a 5% coupon – I think it is reasonable."

The bidding for the RBS branches has sparked fierce competition. John Maltby, the former Lloyds Banking Group banker who leads the church-backed bid, insisted this offer was the best value for the taxpayer. "We have completed full due diligence. We have raised the money and we are ready to go."

To entice bidders, RBS is reviving the Williams & Glyn's brand, which disappeared from British high streets in 1986.But the return to an old brand – created by RBS in 1969 to unite its English and Welsh banks – has risks for any investor.

Higginson played down the potential for an exodus of customers. "We have come through that phase of disruption," he said. "This is a business that has had the 'for sale' sign above the door for five years."

He said the W&G team would be ready to exchange contracts this year, with the Williams & Glyn's sign going up on high streets "as soon as possible after that".

Article Source : http://www.guardian.co.uk

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A group of City investors and pension funds have called for a return to "simple banking" as they launch a bid to take over more than 300 branches put up for sale by Royal Bank of Scotland.

W&G Investments, a consortium of City funds, is to file its official offer today to take over the 315 branches that RBS is being forced to sell off by Brussels as a condition for approving the bank's £45bn taxpayer bailout at the height of the banking crisis.

The consortium is a roll call of more than a dozen blue-blood City names, including Schroders, Threadneedle and Lansdowne Partners, and floats on the London stock exchange today with the aim of raising £15m to fund its bid.

RBS has already received two rival offers for the branches, which have 1.7 million retail customers and 230,000 small and medium-sized business accounts. One is from a consortium backed by the Church of England that is promising "ethical" investments; another is promoted by private equity firms AnaCap and Blackstone.

Royal Bank of Scotland has now received three bids for the 315 branches it is being forced to sell under EU rulesThe bank is expected to announce its decision in the next few weeks, but could reject all three bids and float the branches as a standalone company on the stock exchange.

The head of W&G Investments, former Tesco finance director Andrew Higginson, said the consortium, with £20bn of assets, was big enough to be the "challenger bank" needed to inject more competition into the UK banking sector.

"We are taking a long-term view about building a genuine challenger bank," he said. "These institutions want a simple banking business that takes deposits in from its customers and lends them out to others and makes a good margin in the middle."

The bank's customers should not necessarily expect the cheapest products, because that was what went wrong during the financial crisis, he said. "There is no great eureka magic formula. It is just a question of behaving well and doing the right thing for them [the customers]."

The group has offered £1.1bn up front, rising to £1.5bn once the branches are formally separated from RBS. The W&G investors would get a £55m payout from the state-backed lender even before the branches were sold, according to the stock market prospectus. Higginson said this was "a very, very low rate of interest" for the risk any investors would be taking on. "We are giving [RBS] £1.1bn on day one and we are getting a 5% coupon – I think it is reasonable."

The bidding for the RBS branches has sparked fierce competition. John Maltby, the former Lloyds Banking Group banker who leads the church-backed bid, insisted this offer was the best value for the taxpayer. "We have completed full due diligence. We have raised the money and we are ready to go."

To entice bidders, RBS is reviving the Williams & Glyn's brand, which disappeared from British high streets in 1986.But the return to an old brand – created by RBS in 1969 to unite its English and Welsh banks – has risks for any investor.

Higginson played down the potential for an exodus of customers. "We have come through that phase of disruption," he said. "This is a business that has had the 'for sale' sign above the door for five years."

He said the W&G team would be ready to exchange contracts this year, with the Williams & Glyn's sign going up on high streets "as soon as possible after that".

Article Source : http://www.guardian.co.uk

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then  its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook