Royal Bank of Scotland Group PLC EC formally approves Alternative Remedies Package (0849R)
19 September 2017 - 2:15AM
UK Regulatory
TIDMRBS
RNS Number : 0849R
Royal Bank of Scotland Group PLC
18 September 2017
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 GBP425m Capability and Innovation Fund that will
grant funding to a range of competitors in the UK
banking and financial technology sectors; and
* A GBP350m 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 GBP50m.
An Independent Body (the "IB") will be established
to administer the Alternative Remedies Package.
RBS will make an upfront contribution of GBP20m
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 GBP320m. Accordingly,
the Alternative Remedies Package remains consistent
with the GBP800m 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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