The U.K.'s Prudential Regulation Authority could launch an independent inquiry into a potential sale by Royal Bank of Scotland Group Plc of its Williams & Glyn operations to either CYBG Plc or Banco Santander SA's Santander UK Plc, The Daily Telegraph reported Dec. 27.
The so-called section 166 report would look into the ramifications of the fact that neither CYBG nor Santander intends to buy the entirety of the business, as well as concerns that IT issues at Williams & Glyn could disrupt the technological operations of the eventual buyer, the Telegraph wrote.
RBS is required to sell the entirety of the business by 2017-end under European Commission mandates relating to its crisis-era bailout. The bank has said it will miss that deadline, the newspaper noted, adding that the U.K. Treasury is now believed to be creating a contingency plan to present to European authorities should a sale not come to fruition.
Among the contingencies being considered is asking the EC to approve a slightly scaled-back sale, allowing a sale to CYBG or Santander to fulfill the mandate, according to the report. RBS is also reportedly considering closing down the business and forcing its customers to find an alternate banking provider.