Final offer for 318 RBS branches in UK

IN A deal expected to shed light on the value of AIB’S UK operation, Santander placed a final offer yesterday for 318 Royal Bank of Scotland branches in the UK.

Media reports yesterday suggested that the Spanish bank scaled back its original offer of £2 billion to around £1.8 billion by yesterday’s bidding deadline.

RBS is being forced to sell off its UK bank branches by the European Commission. A number of interested suitors are believed to have fallen by the wayside and, last Friday, industry sources said Santander was likely to be the only bidder.

RBS, Santander and UBS, which handled the auction, all declined to comment.

“A lack of credible buyers for RBS’s branch network highlights the challenge facing AIB as it attempts to offload its UK division by year-end,” commented NCB stockbrokers in a morning note yesterday.

According to NCB, AIB’s UK division had assets of €23.5 billion at the end of 2009, comprising First Trust in Northern Ireland and Allied Irish Bank (GB) in Great Britain, which have 31 and 48 branches respectively.

AIB is selling its overseas businesses in Poland, the US and the UK to raise some of the € 7.4 billion required to meet the new capital rules set by the Financial Regulator.

“We were always of the view that the UK disposal for AIB would be the trickiest to effect, so will be watching the RBS sale process with interest,” said Eamon Hughes, an analyst with Goodbody Stockbrokers.

It emerged yesterday that Bank Pekao, Poland’s second largest bank, is analysing a purchase of Bank Zachodni WBK, the Polish bank in which AIB has a 70 per cent stake. (Additional reporting – Reuters)