Clydesdale and Yorkshire Bank owner CYBG has made a bid for Royal Bank of Scotland’s Williams & Glyn branch network after Spain’s Banco Santander called off its talks to purchase the branches.

“The board of CYBG can confirm that the company has engaged in discussions with RBS and has made a preliminary non-binding proposal to RBS in relation to its Williams and Glyn operations,” said CYBG in a statement.

“This engagement is ongoing and there can be no certainty that any transaction will occur, nor as to the terms on which any transaction might be concluded.

“A transaction will only be pursued if it is determined by the board to be in the best interests of CYBG shareholders. Further announcements will be made as required.”

CYBG added: “Whilst the board of CYBG recognises it has a duty to continually evaluate all potential opportunities to enhance its business, it will only evaluate combinations that are in line with the company’s strategic objectives.”

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.

Some analysts value the business at about £1.3 billion.

RBS was hoping to get an agreement to sell the roughly 300 branches by the end of 2016 with full divestment by the end of 2017.

But the process has been plagued by delays and IT complications — meaning it is not clear whether RBS will now meet the EC deadline.

“We continue to explore options in meeting our obligations to the European Commission,” RBS said in a statement.

“We have been clear that there is interest in the business and this remains the case.”

RBS has said the Williams & Glyn branch network has about 1.8 million customers, net loans and advances of £20 billion and customer deposits of about £24 billion.