Santander wins backing to buy 300 RBS branches

The purchase of more than 300 Royal Bank of Scotland branches by Spanish banking giant Santander moved a step closer yesterday after the deal was approved by the European Commission.

The Spanish group agreed to pay 1.65 billion for the assets in August, which also include 40 banking centres aimed at small and medium-sized businesses.

The commission ordered RBS - 83 per cent owned by the taxpayer - to sell the branches as a condition for receiving bailout aid from the government in the wake of the financial crisis.

The EU body had to investigate potential competition concerns before it could approve the deal, which should be completed by the end of 2011.

A spokesman for Santander said: "The acquisition is not expected to complete until around the end of 2011 and until completion this business remains part of the RBS Group."

The banks must next seek approval from UK regulator the Financial Services Authority at the High Court in London.

The EC said: "The commission's investigation has shown that the acquisition by Santander will not raise any competition concerns, in particular because the latter presently only has a relatively limited share of the commercial banking market in the UK and the overlaps resulting from the acquisition are low."