Alan Hughes, First Direct's former chief executive officer, revealed that he will be spearheading a consortium that include private equity firms Anacap and Blackstone in obtaining banking assets from the Royal Bank of Scotland, or RBS. The group is prepared to offer a bid of around GBP1 billion for the 315 branches being offered for sale by RBS.

Government officials involved in the deal said that they hope the divestment from these bank assets would improve competition within the High Street banking sector. The divestment is mandatory under European state aid rules.
 
"With Hughes this is all about making an offer that brings real operational expertise to create a challenger bank and real competition to the market," a person close to the consortium said.

The two other leading bidders in the deal are a group led by Corsair and a group of 20 UK asset managers. Corsair is a US private equity firm that has the support of a Church of England fund.