Royal Bank of Scotland Pulls Williams & Glyn's Out Of Retirement

What does a financial institution do when it runs into trouble? Apparently, the simplest solution is to rebrand.

In the US, embattled insurance giant AIG changed the names of various divisions to create distance from the parent company. AIG's property and casualty business, for example, became Chartis. General Motors' GMAC financial unit was re-named Ally Bank, to eliminate the distasteful association with a bankrupt automaker.

Now Royal Bank of Scotland (RBS) is planning to extricate itself from a mess with the European Commission with a simple name change. The Commission is forcing RBS to dump 312 of its branches in England and Wales. RBS plans to change the name of those branches to Williams & Glyn's, to make them more attractive for sale.

Why Williams & Glyn's? In his blog, British financier Richard Northedge explains:

Does Williams & Glyn’s have any intrinsic value? RBS bought Williams Deacon bank in 1930 and nine years later acquired Glyn, Mills & Co. They were not merged within Royal to create the Williams & Glyn’s brand until 1970 however and they adopted the RBS name in 1985. W&G was regarded as a small, well managed, clearing bank, but its life as that brand was short.

RBS needs a name however, and Williams & Glyn’s is easier to revive than creating a brand new brand and better than a “newco” style name. For nostalgists who think banking was better in the old days, W&G may well have value.

According to Northedge, the same concept may be adopted by Lloyds, also under fire to sell branches. That financial institution may rename the branches it needs to unload "Cheltenham & Gloucester," after a Lloyds subsidiary.

The recent epidemic of financial institution meltdowns seems to have created a robust market for rebranding. Obviously, banks and insurance companies with something to lose are hoping consumers will respond more favorably to names that leave behind negative associations to their former owners.