Resolution Group, the UK buy-out firm and Blackstone are in race along with National Australia Bank (NAB) to buy more than 300 branches being sold by Royal Bank of Scotland (RBS), reported the Financial Times.

Reportedly, the European Union competition body is forcing RBS to sell its branches in England and Wales and NatWest branches in Scotland after it received lifeline from the UK government during the financial crisis. The UK government owns 84% in RBS.

NAB is said to be approached by a number of potential backers trying to foray into the UK banking market. The Australia-based bank, which owns the Clydesdale and Yorkshire banks, is in talks with some parties about how to fund expansion in the UK.

NAB has more than 300 retail branches in the north of England and Scotland and 70 business centres that provide banking services to SMEs. At present, it has less than 3% market share in the UK and is understood to be interested in pursuing an acquisition to expedite its expansion.

John Tiner, CEO of Resolution, said it would be unlikely to try to raise capital for a banking project until it had made greater headway on its first project.

Most of the big UK banks have been blocked on competition grounds. Other banks showing interest to buy RBS branches include the Spain-based Santander and Virgin Money.

Resolution Group, the London-listed, Guernsey-based firm, was established in 2008 to pursue restructuring projects across financial services in the UK and western Europe. It mainly focuses on UK life assurance and asset management, based around Friends Provident, which it bought last autumn.