Market report: RBS on the slide as Santander pulls the plug on bid

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A rally in the banking sector left Royal Bank of Scotland behind today as Santander UK pulled out of the running to buy its Williams & Glyn business.

Shares in the state-backed lender were off 2.2p to 181.5p as it emerged the Spanish-owned bank had decided against snapping up the 300 W&G branches. Talks over the price stalled, according to the Financial Times.

Last month, RBS scrapped plans to relaunch W&G as a standalone bank and decided to sell to a rival.

The bank, which was bailed out by the Government to the tune of £45 billion at the height of the financial crisis, is obliged to offload the business by the end of next year under European state aid rules.

RBS was the only faller among the banks, which were on the rise after the Bank of Japan tweaked its bond-buying to aid its ailing economy, lifting the FTSE 100 by 27.93 points to 6858.72.

“Instead of taking interest rates further negative, markets are digesting the tweak as proof that central bank innovation has life in it yet,” said Mike van Dulken, head of research at Accendo Markets.

The best rise among the banks came from Barclays, which surged 4.08p to 170.53p after HSBC upgraded it to a Buy, arguing that any sale of its non-core assets would provide a boost.

Shares in Ocado edged down 0.3p to 268.5p as Deutsche Bank cut to Sell after last week’s gloomy trading update and warned that “things are not going to get any easier”.

Arrow Global spiked 17p to 292p on reports that private-equity bidders — including Apax Partners — are eyeing the debt purchaser and manager.

On AIM, online casino firm 32Red was among the winners, rising 5.5p to 138p. It revealed total net gaming revenues for the first half of the year were up 63% to £30.4 million, and pre-tax profits shot up from £100,000 to £2.5 million as it nudged up its interim dividend to 1.3p per share.

The company also unveiled a three-year deal with ITV to launch slot games based on hit shows I’m A Celebrity… Get Me Out Of Here and Ant & Dec’s Saturday Night Takeaway.

The full scale of the challenge facing small-cap brokers was laid bare today by a painful set of results from Cenkos Securities, which dived 16.45p, or 14%, to 98.55p after reporting “very difficult market conditions” in the first half of the year.

Revenues slumped 71% to £15.3 million and pre-tax profits plummeted 91% to just £1.7 million.

The firm, which was fined £530,000 by the FCA last month for its role in the Quindell saga, bagged a £27 million windfall last year from the £1 billion reverse takeover of BCA but it did no deals of that size this year.

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September 21, 2016 |
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