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Banking industry

Santander's Acquisition of RBS Branches Sparks Criticism Over Lack of Competition

Strategic Insights

— 1 min read

Santander's acquisition of 318 Royal Bank of Scotland branches has been met with criticism from union leaders and consumer groups, who claim it fails to inject fresh competition into the high street. The deal has been valued at £1.65bn, with Santander taking on 5,000 employees, 40 banking centers, and 244,000 small business customers. Antonio Horta-Osorio, chief executive of Santander in Britain, cited the acquisition as a boost to the bank's presence in small business banking. However, union leaders and consumer groups have expressed concerns that the deal will lead to a decline in the number of financial service providers available to British customers.

Key Takeaways:

  • The acquisition of 318 RBS branches by Santander has been criticized for failing to inject fresh competition into the high street.
  • Santander is taking on 5,000 employees, 40 banking centers, and 244,000 small business customers through the deal.
  • The acquisition is part of RBS's forced sale of branches to comply with EU regulators' requirements following the £54bn government bailout.
  • Union leaders, including Stuart Davies of Unite, have questioned whether selling to Santander is in the best interests of consumers.
  • Consumer group Which? has called for public interest tests to be conducted whenever UK Financial Investments makes disposals or sells shares.
  • Lloyds is also expected to sell 600 branches in the next four years to appease European regulators.
  • Santander has been criticized for its performance in customer satisfaction surveys, with Which? chief executive Peter Vicary-Smith stating that "Santander consistently performs poorly".

Statistics:

  • The deal is valued at £1.65bn, with Santander paying £350m more than the £1.3bn value of the RBS assets as at 31 December 2009.
  • Santander is acquiring 40 banking centers that service 244,000 small business customers and 1,200 mid-corporate customers.
  • The acquisition includes four corporate banking centers and three private banking centers.
  • RBS was forced to sell the branches as part of its compliance with EU regulators' requirements following the £54bn government bailout.
  • Lloyds is expected to sell 600 branches in the next four years to appease European regulators.

Sources:

  • Bloomberg.com: "Santander to buy Royal Bank of Scotland branches for £1.65bn"
  • Financial Times: "Santander buys RBS branches as part of £54bn bailout"
  • Which?: "Response to Santander's acquisition of RBS branches"
  • The Guardian: "RBS forced to sell 318 branches to Santander"
  • BBC News: "RBS to sell 318 branches to Santander"

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