Page 43 - TSB G Case Study

this end the EC required RBS to sell off five parts of the
business, four of which it achieved.

The fifth and final requirement was the divestment of

Williams & Glyn (W&G). W&G was due to be sold to a

competitor or set up as a standalone bank. Neither

happened.

The £835m fund (initially thought to be £750m in

February 2017) (9), announced by the government in July,

2017 was set up as part of RBS’ state aid commitments to

increase competition in business banking by encouraging

more business customers to switch accounts to eligible

challenger banks.

However, the creation of the Challenger Fund formed the

basis of a new agreement in relation to RBS’s remaining

State Aid commitments and replaced the existing

requirement to divest Williams & Glyn which had to be

completed by 31 December 2017. (15)

Pester confirmed TSB would attempt to win a grant from
the £835m "Challenger Fund" (8) set up by RBS to

encourage more competition in the UK banking business
lending market saying:

"If we get one of the bigger grants from RBS

then we will use every penny of it to help

support small businesses and to make it as

uncomfortable as possible for the big five."

The fund is open only to banks with a balance sheet of

less than £350bn in the UK.