Clydesdale and Yorkshire Bank owner CYBG is now a possible bidder for Royal Bank of Scotland’s Williams & Glyn branch network after Banco Santander pulled out of talks to buy the division because of the price tag, according to bankers.

RBS has to divest Williams & Glyn by the end of 2017 as a condition of European Commission rules for receiving a £45 billion government bailout during the financial crisis.

Santander submitted a formal offer last month to buy the Williams & Glyn network, which has 314 branches, about £24.2 billion of assets and about two million customers, Bloomberg News reported.

Santander could return to negotiations if RBS lowered the price, bankers said.

Bloomberg reported that Williams & Glyn will probably be sold at a discount to its £1.3 billion pounds of equity, citing a comment by RBS chief financial officer Ewen Stevenson last month.

Neil Wilson, a markets analyst at ETX Capital, said Santander’s withdrawal was “fresh humiliation” for RBS, which is still 73% owned by the UK Government.

“Santander might just be playing hard ball and wants to remark these assets,” said Wilson.

“Brexit has undoubtedly played a part.

“With all sorts of questions about the state of UK financial services hanging in the air in the wake of the referendum, it’s hard to really say what Williams & Glyn is worth.

“Whoever buys it, it’s likely to be for less than the £1.9 billion RBS wants.”