RBS in EC branch sale threat

EUROPEAN Commission (EC) lawmakers may force Royal Bank of Scotland (RBS) to sell off 312 of its RBS-branded bank branches, under new rules for firms receiving state bailouts.<br /><br />Neelie Kroes, the EC competition commissioner, is considering forcing the bank to slash its small business banking operations by 10 per cent. This would be achieved if the firm sold its entire branch network for England and Wales.<br /><br />The plan is being brokered by HM Treasury (HMT), which has provided RBS with its &pound;20bn giant bailout package in return for a 70 per cent stake in the bank. Kroes is expected to insist RBS offloads the branches, either by selling them to a rival bank or private equity firms or listing them as an independent entity on markets.<br /><br />This could include it reviving the Williams &amp;Glyn&rsquo;s banking name and rebranding the branches before selling them. <br /><br />But RBS, which owns NatWest, believes its programme of reducing its balance sheet by selling off non-core assets is sufficient. The bank has already undertaken an ambitious reduction target of 40 per cent.<br /><br />And it believes it should not be forced to interfere with its branch structure as it did not boost its high-street presence in the boom years before the credit crunch. Rival bank Lloyds TSB bought out mortgage lender HBOS as the crisis struck, boosting its bank branch presence in a disastrous deal that led to its collapse. <br /><br />The new EC rules governing firms under state aid are being viewed as a punishment for banks that undertook risky practices. <br /><br />RBS said in a statement: &ldquo;We are co-operating with HMT to work to achieve a sensible solution with the EC.&rdquo;