LONDON - The Royal Bank of Scotland agreed on Friday to sell a stake in its branch network for £600 million, or $966 million, to a consortium of investors led by Corsair Capital and Centrebridge Partners.
The bank, which is 81 percent owned by taxpayers after receiving a multibillion-dollar bailout during the financial crisis, has been ordered to sell 314 of its branches to satisfy European rules over state aid.
The branch network, which is expected to be listed on the London Stock Exchange under the name Williams & Glyn’s after an initial public offering, has garnered attention from several investment groups looking to take advantage of increased lending in Britain’s rebounding economy.
After a series of rounds, the consortium led by Corsair and Centrebridge, which also includes the Church of England’s investment fund and RIT Capital Partners, prevailed over a rival offer led by Blackstone and AnaCap Financial Partners, as well as one from W&G Investments, a group of British investors.
Under the terms of the deal, Corsair, Centrebridge and its partners will pay £600 million for up to a 49 percent stake in Williams & Glyn’s after its I.P.O., whose timing has not been determined. The investment comes in the form of a bond that will be exchanged for shares when the I.P.O. is completed. Royal Bank decided to spin off Williams & Glyn’s after the Spanish financial giant Santander pulled back from buying the branches last year.
“This deal concludes what has been a very competitive process, with several highly credible bidders,†Royal Bank of Scotland’s chief finance director, Bruce Van Saun, said in a statement. “We believe this transaction demonstrates that Williams & Glyn’s is a viable and attractive business which will be positioned as a strong, customer-focused challenger bank.â€
Shares of Royal Bank fell 1.5 percent in afternoon trading in London on Friday. The bank’s stock has risen 43 percent over the last 12 months.
Despite Europe’s continuing financial difficulties, the British economy is starting to show signs of recovery, and analysts say that investors are eager to back the country’s banking as it rebuilds from the financial crisis.
Earlier this month, the Lloyds Banking Group, which also received financial aid from the British government, announced that lawmakers had sold a 6 percent stake in the bank for $5.1 billion. The share sale reduced taxpayers’ ownership to 33 percent.
While the fortunes of Lloyds have recovered through a reduction in its balance sheet and other cost-saving steps, Royal Bank continues to be weighed down by billions of dollars of so-called noncore assets.
By spinning off the 314 branches, the bank, based in Edinburgh, is shedding a large lending business focused on British small businesses. The network has about 1.7 million customers with outstanding loans of £19.7 billion and customer deposits totaling £22.2 billion.
As part of the deal announced on Friday, John Maltby, Lloyds’s former head of commercial banking, will become chief executive when Williams & Glyn’s completes its I.P.O.
“We have built the foundations of a strong partnership with Royal Bank of Scotland and are thrilled to continue working together to deliver this new bank,†Centerbridge’s chief executive, Lance West, said in a statement on Friday.
