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European Commission formally approves Alternative Remedies
Package
in relation to RBS's remaining State Aid commitments
18 September 2017
RBS has received confirmation that an alternative remedies package
announced on 26 July 2017 (the "Alternative Remedies
Package") ,
regarding
the business previously described as Williams & Glyn
,
has
now been formally approved by the European Commission ("EC") in the
form proposed .
The Alternative Remedies Package forms the basis of a new agreement
in relation to RBS's remaining State Aid commitments and replaces
the existing requirement to divest the business previously
described as Williams & Glyn by 31 December 2017.
The Alternative Remedies Package is focused on the following two
remedies to promote competition in the market for banking services
to small and medium-sized enterprises ("SMEs") in the
UK:
● A
£425m Capability and Innovation Fund that will grant funding
to a range of competitors in the UK banking and financial
technology sectors; and
●
A
£350m Incentivised Switching Scheme which will provide funding
for eligible challenger bodies to help them incentivise SME
customers of the business previously described as Williams &
Glyn to switch their accounts and loans from RBS paid in the form
of "dowries" to the receiving bank. In addition, under the
terms of the Alternative Remedies Package, should the uptake within
the Incentivised Switching Scheme not be sufficient, RBS may be
required to make a further contribution, capped at
£50m.
An Independent Body (the "IB") will be established to administer
the Alternative Remedies Package. RBS will make an upfront
contribution of £20m to cover certain operational expenses of
the IB relating to the Alternative Remedies
Package.
RBS has agreed to provide separate indemnities to each of the IB
and Her Majesty's Treasury (HMT) to cover liabilities that may be
incurred in implementing the Alternative Remedies Package. Whilst
no such liabilities may ever arise, these indemnities collectively
are capped at a maximum amount of £320m. Accordingly, the
Alternative Remedies Package remains consistent with the £800m
provision that RBS took in relation to the expected costs of the
package in H2 2016 and H1 2017.
Ross McEwan, RBS CEO, said "We are pleased that we now have final
approval from the European Commission for the Alternative Remedies
Package. This allows us to resolve our final State Aid divestment
obligation and brings welcome clarity for our customers and
staff .
It also builds on the progress we have made already this year in
resolving our major legacy issues through reaching a settlement
with the Federal Housing Finance Agency, and resolving the 2008
Rights Issue litigation. We remain committed to resolving our last
remaining major legacy issue, the investigation into our historic
US RMBS activities."
This transaction is a smaller related party transaction, with HMT,
under LR 11.1.10R.
Investor Relations
+44 (0)20 7672 1758
Media relations
+44 (0)131 523 4205
Forward Looking Statements
This announcement contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
including those related to RBS and its subsidiaries' regulatory
capital position, risk-weighted assets, impairment losses and
credit exposures under certain specified scenarios. In addition,
forward-looking statements may include, without limitation,
statements typically containing words such as "intends", "expects",
"anticipates", "targets", "plans", "estimates" and words of similar
import. These statements concern or may affect future matters, such
as RBS's future economic results, business and capital plans and
current strategies. Forward-looking statements are subject to a
number of risks and uncertainties that might cause actual results
and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking
statements. Factors that could cause or contribute to differences
in current expectations include, but are not limited to,
legislative, fiscal and regulatory developments, competitive
conditions, technological developments, exchange rate fluctuations
and general economic conditions. These and other factors, risks and
uncertainties that may impact any forward-looking statement or
RBS's actual
results are discussed in RBS's UK annual report and accounts and
interim reports and materials filed with, or furnished to, the US
Securities and Exchange Commission, including, but not limited to,
RBS's Reports on Form 6-K and most recent Annual Report on Form
20-F. The forward-looking statements contained in this announcement
speak only as of the date of this announcement and RBS does not
assume or undertake any obligation or responsibility to update any
of the forward-looking statements contained in this announcement,
whether as a result of new information, future events or otherwise,
except to the extent legally required.
MAR
This announcement contains information that qualified or may have
qualified as inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 (MAR). For the
purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055, this announcement is made by Matt Waymark, Head of
Investor Relations for The Royal Bank of Scotland
Group.
Legal Entity Identifier: 2138005O9XJIJN4JPN90
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THE
ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
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By: /s/
Jan Cargill
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Name:
Jan Cargill
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Title:
Deputy Secretary
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