SNP relaxed on challenger bank sector consolidation

ANy move by Spanish bank Sabadell to use its £1.7 billion takeover of TSB earlier this year as a platform to pick up other “challenger” banks in the UK would have to be judged “on its merits”, a leading Scottish politician has said.

Stewart Hosie, left, wants to see more competition on the high street. Picture: Greg Macvean

It follows weekend reports that Sabadell is lining up a bid in particular for either Glasgow-based Clydesdale Bank or Williams & Glyn, the assets being spun off by National Australia Bank (NAB) and Royal Bank of Scotland respectively.

Stewart Hosie, Treasury spokesman and deputy leader for the SNP in Westminster, told The Scotsman: “We want to see as much banking competition as we can on the high street.

“But banks need to be sufficiently large to be able to compete. There is a move to consolidation. Whether it was Clydesdale, Yorkshire Bank [Clydesdale’s sister bank]or RBS assets being sold off, we would have to consider every [consolidation] attempt on its merits.

“We want to see maximum competition, but banks need to be large enough to survive.”

It comes as NAB is planning to demerge and float Clydesdale and Yorkshire banks in a mooted £2.5 billion listing on the stock market by late this year or early next.

That follows tough trading at NAB’s UK business in recent years, including regulatory fines for mis-selling and bad property loans.

A Clydesdale Bank spokesman said yesterday: “NAB made clear in its trading update last month that substantial progress had been made towards a demerger and initial public offering (IPO) of Clydesdale and Yorkshire banks. That remains the same position.”

Sabadell chief executive Jaime Guardiola Romojaro said last March that the UK challenger bank market, which has seen a rash of new entrants such as Virgin Money, Tesco Bank, TSB and Aldermore, was “unconsolidated” and that the Spanish bank was in a position to grow.

TSB chief executive Paul Pester has also said the business would “continue to look at assets, whether from the UK government selldown or from other opportuities”.

If Sabadell did hit the UK acquisition trail, it would mirror the actions of its larger Spanish rival Santander, which, after picking up Abbey National in 2004 ,went on to hoover up Bradford & Bingley and Alliance & Leicester during the financial the crash.

A TSB spokesman said yesterday that it “did not comment on rumours and speculation” while Sabadell also declined to comment. Some City bankers wonder, however, whether Sabadell would have the capital or appetite for another British deal so soon after the TSB acquisition.

One said: “Sabadell’s chief executive has also indicated it would take two years to integrate TSB. It is difficult to see how that totally squares with a move on Clydesdale.”

An RBS spokesman said: “Williams & Glyn will play an important role in the UK banking landscape and will be an excellent addition to the market. We are moving towards an IPO by the end of 2016.”

Meanwhile, Hosie said while the SNP supported George Osborne’s new 8 per cent surcharge on bank profits in the UK it wanted reassurance that there would be no “unintended consequence” of it constraining challenger banks from retaining earnings to mount a strong challenge to the Big Four.