Nationwide, the UK’s largest building society, has expressed an interest in bidding for 316 branches put up for sale by Royal Bank of Scotland.
RBS was ordered to sell the branches by European regulators as a condition of receiving a £45 billion bailout in 2008 which left it 82 per cent owned by the taxpayer. It was forced to restart the sale process after Spain’s Santander pulled out of a £1.65bn deal last month.
However, Nationwide chief executive Graham Beale said the group would only make an offer if it could overcome “some enormous complexities” involved in any deal.
Speaking to Reuters, Beale said: “Strategically we want to enter into the SME space. If there’s anything I could do that would accelerate our strategy it would be of interest. Within that context, RBS is something which we will watch very carefully.”
He added: “There are clearly some enormous complexities there, otherwise that deal would have been done. We need to understand just what those issues are before we can be committal on the point.”
Other likely bidders for the branches, which have 1.8 million retail customers and 240,000 small business accounts, are believed to include Virgin Money and private equity firm JC Flowers.
Beale’s comments came as Nationwide set aside a further £45 million to compensate customers who were allegedly mis-sold payment protection insurance (PPI), taking its total provision to £173m.
Along with higher impairment charges at its commercial lending division, the increased PPI bill saw first-half operating profits at the group fall to £151m, down from £181m a year earlier.