RBS to resurrect the Williams and Glyn brand

Last post: Sep 28, 2013

RBS have announced that they will divest assets into a new bank - albeit with a very old name - Williams & Glyn

The Royal Bank of Scotland (RBS) will be restoring the William & Glyn's brand and as many as 314 RBS branches mainly in north-west England will be transferred under this brand that will focus on small business banking. At the helm of this £800 million investment is private equity group Corsair Capital, the Church Commissioners for England, RIT Capital Partners of Lord Jacob Rothschild, and Centerbridge Partners, a US private equity investor.  This investment represents a minority share in Williams & Glyn's of no more than 49% at the point of IPO, which will happen in late 2015. The new bank will receive a £600 million investment upfront via a fully subscribed bond issue, with £330 million coming from the consortium and the remaining £270 million will be put up by the markets division of RBS as a vendor debt with commercial terms to the consortium.  Aside from this initial investment the groups have agreed to put up an additional £200 million depending on how the share price of Williams and Glyn's performs in the 18 months following its IPO. The new business will be headed by former commercial banking chief of Lloyds, John Maltby in the chief executive position, and former chief executive of United Utilities, Philip Green taking its chairmanship position.  Former trade minister Lord Davies, who is also vice-chairman at Corsair, will be a non-executive director. Two other offers were outdone by the Corsair group.  That of the Blackstone and AnaCap group, which was trumped by the management team of Corsair.  In particular, RBS and regulators were keener on working with Mr. Maltby and Lord Davies, who is also a former chairman at Standard Chartered. Another unsuccessful bid came from W&G Investments whose deal was said to have been as much as £1.75 billion.  Having taken into consideration assumptions on future profits of the bank's next two years of business.  The deal fell through though when the group was not able to complete its due diligence and failed to get firm commitments from all investors.  The group was comprised of some of the UK's biggest fund managers such as Schroeders and Threadneeedle. The new partnership of Corsair and RBS is currently rebranding the Williams & Glyn's business and separating the accounts from that of RBS.  A technology platform for mobile and web-based banking is also being prepared, as well as acquiring a banking license, and establishing a new trading company.  As of the moment it will be run as a division of RBS, before the formal separation and IPO. The brand will aim to become an active challenger bank and currently has a sizeable SME and mid-corporate presence of around 5% share and a 2% share of the current account market or around 1.7 million customers.  It has a £19.7 billion loan book and will house its main offices in Manchester.