The Royal Bank of Scotland is under renewed pressure to sell 315 of its branches by the end of 2013 as two of its three restless bidders call for the state-owned bank to speed up the process.
Two of the bidders, a consortium called W&G Investments and US private equity firm Corsair, told Reuters in a set of interviews that they want to start work on creating a new challenger bank to support small business lending, as soon as possible, preferably before the end of the sale process.
RBS must sell the branches by the end of the year as part of the conditions for receiving £45bn ($70.5bn, €52.8bn) in bailout funds. The rescue package resulted in the UK government taking an 81% stake in the bank to spare it from bankruptcy during the height of the financial crisis.
Spanish banking giant Santander was on the cusp of scooping the 315 branches and 1.8 million customers towards the end of 2012, but the £1.6bn deal collapsed. Santander blamed delays in completing the transition of branch ownership, such as the transfer of technology.
"Having been a division within RBS with a for-sale sign above it for five years, inevitably it's been slightly neglected," said W&G Non-Executive Chairman Andy Higginson, a former executive director of Tesco Finance, in an interview with Reuters.
"The staff have done a fantastic job in holding the customers, but you know this business needs separate focus, the management vigour that a for-sale sign doesn't allow you to have."
In a regulatory filing, as it listed on the AIM stock market in London, W&G had already warned that it is possible the branches sale "will not be achieved within the two-year period currently contemplated", saying it is "complex and time consuming".
Corsair, which includes investors such as Standard Life and the Church of England, would make ex-Lloyds Banking Group chief executive John Maltby boss of the new challenger bank to be spun out of the 315 RBS branches.
"The quicker the process can come to a successful conclusion and we can get on and build this new bank the better it is for all parties," Maltby said in a separate interview with Reuters, in which he also revealed Corsair's plan to become an £800m cornerstone investor in the new entity and float it with a value of over £1.5bn.
A third bidder, UK private equity firm AnCap, also plans to float the new business onto the stock market if RBS accepts its proposal.
Britain's government is looking to sell its stake in RBS and has appointed risk analyst BlackRock Solutions as advisers on the Treasury's review of if the bank's toxic assets should be hived off into a "bad bank" ahead of an eventual re-privatisation.
Since being bailed out by the Treasury, RBS has reformed its balance sheet by winding down risky assets, built up before the financial meltdown.
It is also shifting focus away from investment banking and towards supporting the real UK economy of consumers and small firms.
RBS has already returned £5.5bn in fees to the government. Accounting for inflation and deducting the fees paid back so far, the government would need to make around £46bn from the sale of its RBS stake just to break even.