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Virgin, Flowers show interest to acquire RBS branches

UK based bank Virgin Money and US private equity firm J C Flowers have shown their interests to acquire 316 branches from Royal Bank of Scotland (RBS), after Spain's Santander abandoned the $2.7bn purchasing plan.

Sources familiar with the matter told Reuters that Virgin was planning to bid for the branches, while JC Flowers wants guarantee on the quality of assets and IT issues, before proceeding with the deal.

With this acquisition, the US asset manager is considering to boost its presence in the UK financial services through its small building society Kent Reliance.

The pullout of Spanish lender is a blow to the 82% government bank, as it will have to start the sale process afresh, where it might be forced to accept a price less than $2.7bn agreed with Santander.

The prevalent eurozone crisis and saturated UK banking sector has prompted Santander to cancel its plan to acquire the aforesaid branches, which serves 1.8 million customers.

European authorities have given the deadline to the UK government majority owned lender to dispose of the aforesaid branches by the end of 2013, to repay the £45bn bailout package it received during the financial crisis of 2008.