Williams & Glyn is no more
Royal Bank of Scotland has scrapped its plans to carve out the Williams & Glyn (W&G) subsidiarity – and instead it is likely to be sold to Santander.
W&G has a network of 300 branches, 1.4 million retail and 200,000 SME clients – effectively the country’s seventh largest bank. It has been dormant for a few decades (RBS absorbed it in the mid-1980s). It was originally set to be revived and re-launched in 2015 by RBS.
Earlier this year, RBS said it was likely to miss the set deadline and the budget for the spin-off yet again, and blamed the technology issues.
IBM and the BPO arm of Infosys were awarded a €300 million contract with RBS to adapt and run the IT platform for W&G in 2013.
It is now official that the creation of a separate banking platform for W&G is no more. RBS has written off £345 million in separation costs in its half-year results presentation, admitting it has been defeated by the IT challenges of the W&G carve-out. It has also unveiled an eye-watering £2 billion loss in the latest financial results.
“Due to the complexities of W&G’s separation, whilst good progress has been made on the programme to create a cloned banking platform, the board concluded that the risks and costs inherent in the programme are such that it would not be prudent to continue with this programme,” according to a statement from RBS.
Santander is now firmly in the picture – it is likely to take over W&G (and this is likely to take the form of an asset transfer, similar to that of Lloyds and TSB). This is not the first time Santander is eyeing W&G, but its earlier attempt was scrapped due to IT integration challenges, it is understood.