April 4, 2017 / 10:08 AM / 4 months ago

EU to investigate new RBS plan to offset state aid

FILE PHOTO: Morning commuters rush past a branch of the Royal Bank of Scotland (RBS) in London November 4, 2011.Andrew Winning/File Photo

BRUSSELS (Reuters) - EU state aid regulators will investigate whether a proposal by Royal Bank of Scotland (RBS.L) to help so-called challenger banks and boost competition among lenders will be able to substitute a previous pledge to sell its Williams & Glyn unit.

RBS last month scrapped the unit sale after failing to find buyers for the business. The sale was a condition of its state bailout during the financial crisis. It subsequently sought approval from the European Commission for an alternative measure.

The EU competition enforcer said on Tuesday that third parties have a month to provide feedback before it decides whether the new measure is satisfactory.

"We can only accept this proposal, if it has the same positive effect on competition as the divestment of Williams & Glyn would have had. This is important for fair competition," European Competition Commissioner Margrethe Vestager said in a statement.

Reporting by Foo Yun Chee; editing by Robert-Jan Bartunek

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