Royal Bank of Scotland Chairman Philip Hampton cast doubt on Saturday on the official reason given by Santander for its surprising decision on Friday to pull out of a 1.65 billion pound deal to buy 316 of the British bank's branches.
Spanish bank Santander has said that more than two years after the deal was struck, it was proving too difficult to carve out the RBS branches from their parent company, and that it was not prepared to wait longer.
But Hampton, speaking to reporters in Tokyo where he was attending events on the sidelines of an International Monetary Fund meeting, raised the possibility that other factors might have been at play.
"People have speculated that it's not an easy time in general for banks to take on a lot of risk-weighted assets," Hampton said. "IT challenges always get overcome."
RBS, 83 percent owned by the British taxpayer, said it would restart the sale process, which had been ordered by European authorities as a cost for Britain's rescue of RBS in 2008.
But RBS may struggle to find a new buyer, and may have to accept a lower price or consider a flotation.
"We had only one serious bidder. Others took a look and decided it wasn't for them. We now have to look at what Plan B might be," Hampton said.
Santander UK agreed to buy the branches and the business of 1.8 million customers in August 2010, but technology and separation issues had pushed back the original December 2011 completion date.
A report by consultancy Accenture estimated that the transfer of retail customers would not be completed until 2014, and the transfer of corporate customers would not be completed until 2015, Santander said.
However, facing a tougher regulatory and economic environment, Santander has also been shedding some assets, and on Thursday it sold 2.5 billion euros (2 billion pounds) of loans to Bank of America Merrill Lynch.
But unlike some other Spanish banks, Santander does not have a capital shortfall. The bank's core Tier 1 capital, a measure of financial strength, was 10.1 percent at the end of the second quarter by Basel criteria and 9.5 percent according to the European Banking Authority.
One possibility for RBS would be for the European Commission to lift the requirement for RBS to sell the branches, which the bank views as a profitable and desirable part of its business.
"What's changed since the original decision is the climate around state aid," Hampton said. "The Commission has been much, much more flexible. It used to be a pretty severe regime but they are making different judgements."
Britain's largest trade union, Unite, called on the government on Saturday to press the European Commission to lift its requirement for Royal Bank of Scotland to sell branches and other assets, warning of a fire sale and mounting uncertainty among the 5,500 staff affected.
But the British government said on Friday that it remained determined to increase competition in the British retail banking sector.
Hampton said British banking was already more competitive than it had been for decades - and RBS could be more valuable to the government if it did not have to sell branches at a knock-down price.
(Editing by Edmund Klamann)