The Commission’s examination focussed on the impact of the proposed acquisition of Rainbow on the markets for personal current accounts, mortgages, card-based consumer credit and cash handling services.
Rainbow comprises RBS’ branch-related retail and SME business in England and Wales, the NatWest branch-related retail and SME business in Scotland, along with certain mid-corporate customer accounts in the UK, in total approximately 300 branches and around 40 SME and business banking centres.
The EC concluded that the sale of Rainbow would not raise competition concerns, in particular because the overlaps between the parties’ activities are very limited and Santander market shares will remain low in the UK.
The analysis confirmed that Santander presently has a relatively limited share of the UK commercial banking market and the overlaps in these areas resulting from the acquisition are low.
The Commission therefore concluded that the transaction would not significantly impede effective competition in Europe.
The Rainbow assets were offered for sale by RBS, together with some other businesses, following the EC’s investigation of state support granted to RBS, including two state recapitalisations totalling more than £ 45bn.
RBS offered to sell Rainbow to gain the Commission’s approval of its restructuring plan, as a measure to share the costs of its restructuring and to compensate for the distortions of competition created by the massive state support it received.
The transaction was notified to the Commission on 21 October 2011 for regulatory clearance under the EU merger control rules.