Royal Bank of Scotland has warned there is a “significant” risk that it will miss the deadline to spin off its Williams & Glyn arm by the end of next year.
The state-backed lender said: “We have concluded that there is a significant risk that the separation and divestment to which we are committed will not be achieved by 31 December 2017.
“Due to the complexities of Williams & Glyn’s customer and product mix, the programme to create a cloned banking platform continues to be very challenging and the timetable to achieve separation is uncertain.”
In December, RBS said it planned to launch a trade sale for Williams & Glyn after receiving a number of approaches.
Although the lender said it continued to prepare for an initial public offering (IPO) of the 300-branch business, it was targeting the signing of a binding agreement to sell the division by the end of this year, with full divestment by the end of 2017.
The Edinburgh-based lender has to sell Williams & Glyn as a condition of its state bailout, and in 2013 agreed a £600 million investment in the firm under a deal with a consortium of investors led by Corsair Capital and Centerbridge Partners.
The group, led by chief executive Ross McEwan, added today: “RBS is exploring alternative means to achieve separation and divestment. The overall financial impact on RBS is now likely to be significantly greater than previously estimated.