RBS Updates On Remaining State Aid Obligation - Quick Facts

(RTTNews) - Royal Bank of Scotland Group PLC (RBS, RBS.L) on Monday issued an update on the company's remaining State Aid obligation.

RBS said it has been informed by HM Treasury that the Commissioner responsible for EU competition policy plans to propose to the College of Commissioners to open proceedings to gather evidence on an alternative plan for RBS to meet its remaining State Aid obligations.

If adopted, this alternative plan would replace the existing requirement to achieve separation and divestment by December 31, 2017 of the business previously described as Williams & Glyn.

As previously disclosed, none of the proposals to acquire the business received by RBS can deliver a full separation and divestment before the December 31, 2017 deadline.

RBS said it has agreed that HMT will now seek formal amendment to RBS's State Aid commitments to pave the way for the Commissioner to propose to open proceedings. In addition to the Commission's proceedings, HMT will carry out a market testing exercise in parallel. The opening of the Commission's proceedings does not prejudge the outcome of the investigation.

Ross McEwan, RBS CEO, said, "Today's proposal would provide a path to increased competition in the SME market place. If agreed it would deliver an outcome on our EC State Aid divestment obligations more quickly and with more certainty than undertaking a difficult and complex sale and would provide much needed certainty for customers and staff."

Subject to the plan becoming finalised and further discussions with the EC and HMT, the company will assess the timing and manner in which it reincorporates the business into the RBS franchises. This reintegration would likely create some additional restructuring charges during 2017 and 2018.