RBS wrote off £2BILLION on phantom bank

And guess what, you’re picking up the bill

RBS wasted at least £1.5billion of taxpayers’ cash creating hundreds of branches of a new high street bank which will never open.

The debacle – costing in total £2.2billion – is the latest farcical chapter in the saga of RBS, 70 per cent of which is now owned by the Government.

It had to be rescued from bankruptcy in a state bailout ten years ago after the disastrous mismanagement of chief executive Fred Goodwin, who was later stripped of his knighthood.

The scheme to create the branches of a bank called Williams & Glyn was concocted to comply with European Commission rules.

The commission approved a £50 billion Government bailout in 2008, but retrospectively ruled that RBS had to divest all of its branches in England and Wales.

RBS began moves to sell the 315 branches, and in 2014 resurrected the brand of Williams & Glyn – a bank it took over more than 30 years ago – to take them on.

Newly designed staff uniforms were ordered, and branches were kitted out with fresh signs and even special wallpaper. Thousands of IT workers were also employed to create the complex computer system required for a new bank.

But in 2016, RBS decided the project was impossible. It claimed the new bank would not survive in the current market and blamed complica- tions in the IT system. However, just months earlier, shareholders had been told that the project had been making ‘good progress’.

One insider told The mail on Sunday that 90 per cent of the new bank’s systems were ‘ready to go’, but were now gathering dust. Thousands of uniforms are also set to be returned.

In the end, RBS wrote off more than £1.5billion on the cost of the failed project.

The Treasury told RBS in February last year that it could give up the plan altogether if it instead invested £750million in boosting banking competition in the UK.

Last September, the European Commission approved that plan, signalling the end of the Williams & Glyn farce.

When the £750million bill for boosting banking competition is taken into account, the whole scheme cost taxpayers more than £2.2billion.

That bill will increase even further as RBS begins the process of returning its prematurely branded Williams & Glyn branches to their original livery.

A spokesman for RBS said last night: ‘A small percentage of Royal Bank of Scotland branches were refurbished. We are now reintegrating the Williams & Glyn network and its customers back into our main business.’

‘New IT systems are now gathering dust’