CMA to assess impact of RBS challenger bank sale

The government and RBS will then identify if "more could be done" for Williams & Glyn to be able to act as a strong competitive challenger to the incumbent banks.

The Williams & Glyn business consists of 307 bank branches in the UK, including the RBS branches in England and Wales, and NatWest branches in Scotland.  

In return for the support which RBS received from HM Treasury in 2008 and 2009, RBS is required to divest the Williams & Glyn business by 31 December 2017.

As part of its role in deciding whether to authorise Williams & Glyn, the PRA will also assess whether the bank has a viable and sustainable business model.

A government statement said:

"In addition to the work being undertaken by the PRA, the government is asking the CMA to assess the likely impact on competition of the new bank, taking account of changes made to its business plan and shape and preliminary feedback from the PRA.

"The divestment of Williams & Glyn represents an opportunity to improve competition in the small business banking sector, and today’s announcement is another step in the government’s long term plan to improve competition in banking, and create a banking sector that gives real choice to retail and small business customers and supports the wider economy."

The CMA will report its findings in July 2015. HM Treasury and RBS will then consider the CMA’s findings and agree appropriate next steps.