Clydesdale launches offer for RBS's William & Glyn branches, report says

CYBG, which has been rumoured to have begun working on the deal since August, has submitted a formal bid to buy the branches from RBS, the Financial Times reported on Tuesday afternoon.

RBS, which needs to sell William & Glyn by 31 December next year as a condition of its 2008 taxpayer bailout, has reportedly seen several interested buyers put off by the massive technology issues involved in separating out the network of branches and their myriad clients from the rest of RBS.

In September Banco Santander withdrew its bid for the division following two offers, prompting RBS chief executive Ross McEwan to admit fears the bank may fail to sell the division by the end of this year.

After CYBG was spun out of the National Australia Bank in February, chairman Jim Pettigrew and chief executive David Duffy wasted little time before enlisting the advice of Morgan Stanley in order to get it hands on assets that would transform it into Britain's seventh-largest bank.

Williams & Glyn's loan book was valued earlier this year at £1.6bn and RBS has spent close to that amount in its efforts to try and establish it as a standalone bank, although analysts predict an offer would be less than £1.3bn.