Hurdles on road to RBS, Lloyds asset sell off - advisers

Earlier this month the Treasury announced the lenders were to sell off branches, mortgage businesses, insurance companies and merchant services as part of plans to create more competition in the sector.

However, Steve Cater, partner in corporate finance at Pricewaterhouse Coopers, did not believe the move would lead to a flood of buyers.

He said: "First and foremost, there is a bunch of financial institutions who are going to be doing their own restructuring so, at the moment, there is a reversal of two years ago in that there are a lot of businesses to be bought and not the people to buy them.

"Plus, there are serious separation issues that the institutions have to go through, and some individual assets have question marks hanging over their attractiveness."

Carl Melvin, managing director of Renfrewshire-based Affluent Financial Planning, said that he thought the sale would not be an easy one.

He said: "People want the good bits and not the bad bits, and it is fairly clear that buyers are only going to be interested in what they think they can make money from so taxpayers will continue to hold the toxic assets. The burden, therefore, is still on them which I do not think is a good sign."

Keith Thomson, director of Investment services for Angus-based Blackadders Financial Services, said the success of the banks' divesting would be determined by the price paid for the assets.

He said: "The question is whether it is going to be a fire sale, and whether the assets are to be sold at market value or not. Plus, are the liabilities of good or poor quality?

"If they are sold off at a competitive value, and I think that is what will happen, then the sale will be somewhat more difficult. There could also be arguments over what constitutes fair value."

However, Mel Kenny, an adviser for London-based Radcliffe & Newlands, said there could be interest from recognised high street names such as Tesco, Boots and Virgin.

He said: "They have an enormous customer base which they can tap into. They have done well up to now through trust and now they could put that to good use by expanding into the banking sector. Tesco are already there and may want to increase its exposure by taking over the high street branches."