Spanish giant Santander now appears to be the only bank with the financial clout to provide the estimated £2bn to support the struggling bank’s loan book, which stands at £24bn.
The Treasury had hoped some new players, including Metro Bank and Virgin Money, would buy the assets to increase competition.
However, a £3bn aid package acquired by RBS through the Bank of England’s Special Liquidity Scheme is unlikely to be a hindrance to the sale. It was feared a new buyer would have to refinance this debt within weeks of a buy-out but a source told City A.M. it will be run-off before a sale takes place.
As part of the deal with the Bank of England, the £3bn will have to be privately refinanced or repaid by 2011. The source said the complexity of the asset sale means it is highly unlikely a deal will be struck before the deadline.