Santander, Virgin and NAB to compete for over 300 RBS branches

RBS, who put the 300 former William & Glyn's branches, along with all its clients and staff, both business and personal on sale, sent out a document last week with a deadline for initial interest gone yesterday.

The branches which are not really viable as a network on their own are seen as potential expansions for Abbey National (now rebranded as Santander) or Virgin Money, who are keen on a further acquisition after recently acquiring Church House Trust.

NAB, National Australia Bank are also thought to be interested after their experience in taking on all the old Clydesdale and Yorkshire banks in 1987-1990.

Both Virgin Money and NAB are thought to have assembled teams in preparation for a bid, as competition laws prevent the big 'four' HSBC, Barclays, Lloyds and RBS being involved in the bidding process.

Meanwhile, former Panmure Gordon analyst, Sandy Chen who looked to take on Virgin and NAB in setting up a new high street bank, has been rejected in his attempts to sign up investors for a planned £200m float.

He now plans to access private capital.

Lloyds Banking Group may also interest new entrants to the banking market as over 600 of their branches are also on sale, including 185 Lloyds TSB's in Scotland, Cheltenham & Gloucester mortgage business, which has 164 outlets, and 250 Lloyds branches in England.

The assembled forces of ex-Lloyds and former William & Glyn branches, along with Northern Rock plc could create a viable fifth major competitor bank in the UK.

Of the three competitors, Abbey (Santander) already has the most branches having already absorbed Alliance & Leicester, Bradford and Bingley, and its original Abbey National branches into its network.

It remains to be seen, whether they further enlarge or leave the rest of the branches to a sixth network, encompassing NAB's Clydesdale & Yorkshire branches, or a new entrant like Virgin Money.

Sandy Chen, Tesco Bank and Metro Bank - a brainchild of entrepreneur Vernon Hill are other names being mentioned for new lenders, but none appear to be starting off by making acquisitions.

Metro Bank, who has today recruited a crop of senior bankers from RBS and HBOS to join its management team has already two branches almost open in Central London (7 days a week opening hours, plush environments, no secuirity glass) says it has plans to open four more this year and 200 within ten years.

Havung applied for a banking license 18 months ago, Metro is understood to be confident that the FSA is close to giving it its banking license.

As part of its negotiations, Metro apparently agreed for Mr Vernon Hill, who lives in the United States to move from chairman to vice-chairman only.

Tesco Bank is also thought to be close to becoming a reality after it recently sent out letters under the new branding of 'Tesco Bank' to its customers instead of 'Tesco Personal Finance'.

The rebranding is thought to be also a sign that the FSA is close to granting it a license.