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RBS could sue Santander over failed deal

The Royal Bank of Scotland could sue Santander after the Spanish bank announced it is pulling out of a deal to buy 316 branches on Friday, according to the Telegraph.

The paper reports lawyers for RBS are considering the legality of Santander’s decision to renege on the £1.65bn deal over concerns surrounding the completion date and integration complications.

While the deal was original set to conclude at the end of 2011, Santander raised concerns that it would not be finalised until 2014.

RBS now faces additional costs resulting from having to start the sales process over again, in addition to penalties from the European Union if a deal is not completed by the end of next year.

The EU deadline gives RBS 15 months to complete a sale in order to comply with state aid rules.

Virgin Money and private equity group JC Flowers are said to be weighing up potential bids for the branches. Virgin Money lost out to Santander in the original bidding war in 2010.

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