Royal Bank of Scotland Group PLC EC formally approves Alternative Remedies Package (0849R)

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 
   [phone] 
 
   Media relations 
   [phone] 
 
 
   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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September 18, 2017 12:15 ET (16:15 GMT)