Banco Santander has bought 318 Royal Bank of Scotland branches in a £1.65 billion deal - a figure which RBS says represents a premium of £350 million the value of the assets.

The sale includes seven NatWest branches in Scotland and 311 RBS-branded branches in England and Wales.

The move reinforces the Spanish bank's competitive clout in the UK market, adding to its current Abbey, Alliance & Leicester and Bradford & Bingley brands.

After being bailed out last year by the UK Government, RBS was instructed by the European Commission to sell off the branches to safeguard competition concerns. Santander first submitted an offer to RBS in June of this year, completion is expected by December 2011.

The deal includes customer accounts attached to these branches, which will be transferred to Santander upon completion of the sale when some 1.8 million retail customers and about 244,000 SME customers will see their accounts transferred.

RBS chief executive Stephen Hester said: "This is an important milestone in our restructuring work and complements the significant momentum behind our recovery plan overall."

RBS, which is now 84%-owned by the taxpayer, said it expected the sale to have "only a modest positive impact" on the group's core tier one capital ratio, "given significant separation costs to be funded by RBS".
rbs.co.uk

santander.com