Commission to investigate RBS plan

The European Commission has launched an in-depth probe into Government proposals which aim to spare banking group RBS from being forced to sell off Williams & Glyn.

As a condition of the bank’s bailout at the height of the financial crisis, the EU rubber-stamped a restructuring plan whereby RBS agreed to sell its Williams & Glyn branch network by the end of 2017 to remedy competition concerns.

However, the lender has struggled to offload the branches, and in February the Treasury and RBS proposed scrapping the sale in favour of a £750 million plan to boost competition in the banking market.

The alternate solution will now be the subject of a new probe.

Competition Commissioner Margrethe Vestager said: “We can only accept this proposal if it has the same positive effect on competition as the divestment of Williams & Glyn would have had. This is important for fair competition.”

The watchdog is seeking views and will “carefully review” responses before taking a final decision on whether or not to accept the alternative plan.

For its part, the Treasury is to begin a market testing exercise to ensure that the new package does in fact increase competition.

A Treasury spokesman said: “This is an important step forward in the process of resolving one of RBS’s most significant legacy issues.”

Picture: PA. RBS’s headquarters at Gogarburn, Edinburgh.