Royal Bank of Scotland (RBS) has struck a £600 million deal to offload more than 300 of its branches.
There were a number of offers on the table for the branches, which RBS was required to sell under EU rules following its acceptance of government bailout money in 2008.
The winning bid was led by Centerbridge Partners and RIT Capital Partners-backed Corsair Capital, two US private equity managers, which will run the business under the historic Williams & Glyn banking brand dropped by RBS in 1985.
RBS chairman Philip Hampton said: ‘We are delighted to be working in partnership with these investors to establish a new challenger bank for UK customers.'
Under the terms of the deal RBS will raise £600 million through a bond issue prior to a planned IPO at a later date, probably within the next two years.
The bondholding will convert into shares following the float, but not represent more than a 49% stake in the new bank.
The bond will be fully subscribed with the investor consortium paying £330 million in cash and the remaining £270 million being paid by the RBS markets divisions. The investors will take on the RBS stake over time.