Nationwide mulls bid for 316 RBS branches

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Nationwide Building Society is considering a bid for 316 Royal Bank of Scotland branches which have been put back up for sale following the collapse of the deal to sell them to Santander, say reports.

The Sunday Times reports the mutual is considering making a bid for the branches. A source close to the mutual told the paper ‘we are watching the situation with interest.”

The move would see Nationwide come up against Sir Richard Branson’s Virgin Money and US private equity business JC Flowers.

Santander pulled out of the deal to buy the RBS branches – agreed for a price of £1.65bn in August 2010 – earlier this month amid concerns over the completion date and integration complications. The deal was initially set to conclude at the end of 2011, however Santander feared it may take until 2014 to transfer the business.

Virgin lost out to Santander in the initial bidding war when RBS held auctions for the branches in 2010. Virgin acquired about 75 retail branches through the acquisition of Northern Rock, which was agreed in November 2011.

RBS is under pressure to sell the stake within the next 15 months to comply with an EU deadline to comply with state aid rules. However, given the complexity of the deal the bank is expected to ask for an extension.

RBS has received three expressions of informal interest, a source close to the bank said. RBS has declined to comment.