News - RBS backs off Abbey takeover bid January 3
With pre-tax profits up 17% to 3.38bn, the bank said it was confident to sustain growth following past year’s string of high-profile takeovers.
But RBS stayed on the sidelines of the Abbey takeover battle, seemingly ruling out a bid on competition grounds.
RBS is the latest in a string of UK banks reporting excellent profits.
Before taking goodwill and other costs into account, pre-tax profits stood at 3.85bn, at the upper end of analysts’ forecasts.
‘No large personal finance insurance‘
A week ago, UK mortgage bank Abbey National agreed to be taken over by Spanish banking giant Royal Bank of Scotland’s local rival HBOS has since confirmed that it is pondering a rival bid for Abbey.
Well before Banco Santander’s announcement, RBS had itself expressed an interest in buying Abbey, but ruled out such a move because it would probably be blocked by competition watchdogs.
RBS chief executive Sir Fred Goodwin refused to comment on the bidding for Abbey, except to say that his bank’s cards were “face up on the table”.
RBS has grown through a string of strategic buys and hostile takeovers, including NatWest in 2000, Irish mortgage lender First Active and general insurer Churchill in 2003 and in May this year US bank Charter One for $10.5bn.
By comparison, this week’s buy of Lynk Systems - which helps banks process non-cash transactions - is small beer, costing just $525m.
But for now the big spending is over, with
European banks on the move?
However, Sir Fred conceded that Banco Santander’s move on Abbey could trigger a rash of European tourist insurance finance zurich mergers, a development he finance gambling insurance internet pharmacy had ruled out.
“It’s feasible now that one [cross-border deal] might happen in the near future,” he said. “I think if one happens, there will be more happening reasonably soon afterwards.”
RBS and Banco Santander hold small strategic department of insurance and finance in each other, a situation that is unlikely to change dramatically even after an Abbey takeover by its Spanish suitor, according to Sir Fred.
Source News - RBS backs off Abbey takeover bid article
Royal Bank of Scotland made bumper profits of 3.38bn during the first half of 2004 and has bought US banking business Lynk for $525m (288m).
Banco Santander Central Hispano.
Sir Fred saying that large acquisitions were off the agenda while the bank focused on completing the Charter One takeover.