Europe to probe cash injection alternative to Williams & Glyn sale

Brussels had insisted the sale was to take place before the end of this year to meet competition requirements attached to the record breaking rescue in 2008 at the height of the financial crisis.

But the process has been beset with technology issues and aborted takeover bids and in February the Treasury and RBS proposed an alternative to the enforced sale.

The new plan favours an alternative £750 million one-off payment to boost competition in the high street banking industry.

However, the appeasement of officials in Brussels in the form of cash will now be the subject of an inquiry.

Yesterday, Competition Commissioner Margrethe Vestager said: “RBS is the leading bank in the UK SME banking market and received significant state support during the financial crisis.

“The commission is now seeking the views of all interested parties on an alternative package proposed by the UK to replace RBS’s commitment to divest Williams & Glyn.

“We can only accept this proposal if it has the same positive effect on competition as the divestment of Williams & Glyn would have had.”

The anti-trust watchdog added it will “carefully review” responses before taking a final decision on whether to accept the alternative plan.

For its part, the Treasury is to begin a market testing exercise to ensure the new package does in fact increase competition.

“This is an important step forward in the process of resolving one of RBS’ most significant legacy issues,” a spokesman said.