Agreement between Commission and the United Kingdom on state aid issues relating to Royal Bank of Scotland

Background and further information:

The alternative package replaces RBS's commitment to divest its UK retail and SME banking operations, Williams & Glyn (also known as 'Rainbow'), as required as part of RBS's restructuring plan. The objective of this alternative package is to remedy the distortion in the UK's SME banking market resulting from the state aid to RBS.

The Commission had opened an in-depth investigation in April 2017 to assess whether the alternative package proposed by the UK authorities is an appropriate replacement for the original commitment to divest Williams & Glyn.

The European Commission approved in December 2009 the public recapitalisation of RBS under EU state aid rules on the basis of the restructuring plan and associated commitments, which were amended in April 2014. The restructuring included the divestment of RBS's UK retail and SME banking operations, Williams & Glyn (also known as 'Rainbow'), to remedy competition concerns in the concentrated UK SME banking sector.

The European Commission reached an agreement in principle with the United Kingdom's Exchequer on 26 July 2017 over the design of the alternative package proposed by the UK authorities for the Royal Bank of Scotland (RBS). That has been confirmed on 18 September.

Reuters, 26.07.17: UK in $1.1 billion deal with EU to settle RBS state aid issues http://www.reuters.com/article/us-eu-rbs-britain-idUSKBN1AB2E2

BBC News, 26.07.17: RBS likely to avoid compulsory sale of Williams & Glyn http://www.bbc.co.uk/news/business-40732337

The New York Times, 26.07.17: UK Agrees $1.1 Billion Deal With EU to Settle RBS State Aid Concerns https://www.nytimes.com/reuters/2017/07/26/business/26reuters-eu-rbs-britain.html

The Scotsman, 27.07.17: Royal Bank of Scotland may be spared branch sell-off http://www.scotsman.com/business/companies/financial/royal-bank-of-scotland-may-be-spared-branch-sell-off-1-4515127

European Commission: DG Communication: STATEMENT/17/2172, 26.07.17: Statement on agreement in principle between Commissioner Vestager and UK Government on Royal Bank of Scotland commitment http://europa.eu/rapid/press-release_STATEMENT-17-2172_en.htm

European Commission: DG Communication: IP/17/3307, 18.09.17: Commission approves alternative to divestment commitment for Royal Bank of Scotland http://europa.eu/rapid/press-release_IP-17-3307_en.htm

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