Former First Direct chief executive Alan Hughes is reportedly planning to spearhead a £1bn bid for 315 branches being sold by Royal Bank of Scotland.
Hughes will lead a consortium of private equity groups Blackstone and Aldermore parent company Anacap, according to the Financial Times. An offer could be made as early as this week.
The FT reports two other groups could also table bids this week.
These are reported to be a group led US private equity firm Corsair and a group of 20 asset managers, including Schroders and Threadneedle, fronted by former Tesco finance director Andrew Higginson.
RBS is required to sell the branches under European state aid rules after it received a £45bn taxpayer bailout at the height of the financial crisis.
Santander had originally planned to purchase the branches, although its bid fell apart in October amid concerns over the completion date and integration complications.
Separately, the Treasury is considering plans to inject another £1.5bn into Royal Bank of Scotland if a review it has commissioned recommends it be broken up into a “good” and “bad” bank, according to the Telegraph.
Rothschild, the corporate adviser which is leading the review, expects to report back in the autumn.
If Rothschild recommends a split then RBS will need more capital. However, the Chancellor is reportedly not keen on the idea of putting more taxpayer capital into the bank.
Instead, the Treasury is looking at options for the “dividend access share”, a mechanism put in place at the time of its 2008 bail-out that makes it expensive for RBS to pay dividends to ordinary shareholders.