Santander Poised to Apply For RBS Small Business Lending Funds
(Bloomberg) -- Banco Santander SA has its eyes on some of Royal Bank of Scotland Group Plc’s businesses again.
The British unit of Spain’s biggest bank plans to apply for a slice of the 775 million pounds ($1 billion) of funds that RBS agreed to make available to stimulate competition in the U.K. small-business lending market.
The European Union accepted an RBS proposal to make the funds available after the bank failed to sell its Williams & Glyn unit. The EU originally ordered the sale in return for the Edinburgh-based bank’s 45.5 billion-pound bailout during the financial crisis. Santander abandoned efforts to buy Williams & Glyn in 2016. The Spanish lender’s U.K. unit will now face rival interest for the funds from several banks in a process to be overseen by an independent body in the summer.
“Only Santander is placed to bring real competition to the small- and medium-sized enterprise market,” said a spokesman in an emailed statement. “A successful bid will allow us to enhance our presence and current offering.”
A spokeswoman for RBS declined to comment.
The RBS plan includes a 425 million-pound innovation fund and a 350 million-pound “incentivized switching scheme” to help smaller banks poach RBS’s small-business customers. Under its agreement with the EU, RBS must also transfer thousands of such clients to rivals.
RBS Plan B Approved in Europe After Williams & Glyn Sale Failed
Santander’s British arm reported a 21 percent slump in pretax profit in the first quarter year-on-year because of competition in the U.K. market, regulatory costs and its exposure to construction company Carillion Plc.
Smaller so-called challenger banks such as Aldermore Group Plc and CYBG Plc have already said they plan to bid for the same funds. Some of the smallest banks have criticized the possible inclusion of bigger banks into the program.
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