RBS shares fall after branch sale failure Shares in Royal Bank of Scotland were among the biggest fallers on the FTSE 100 on Monday after its plans to sell more than 300 branches to Santander collapsed. The stock lost 1 per cent to 268p as traders got their first chance to react to Friday's news that the Spanish lender lost faith in its prospects to expand its presence on the UK high street by closing the deal by the end of the year. The failure of the sale damaged the part-nationalised lender's ongoing attempts to meet regulatory demands made after the UK government's rescue of the bank at the height of the financial crisis. The sale of 316 branches was mandated by European regulators, and came at the end of the same week in which RBS sold 30 per cent of its Direct Line insurance business. Nonetheless, analysts were sanguine about the wider implications of the failed sale, which was to include the accounts of 250,000 small business customers, 1.8m retail savers and borrowers, and the transfer of 5,000 employees. Chris Manners, analyst at Morgan Stanley, said it was "not material to the RBS recovery story. It may be hard to find another buyer, but there is the potential that RBS could ask the EU to keep the branches given the changing attitudes to state aid ... We expect the impact of the news to be limited for RBS's stock. Gary Greenwood, analyst at Shore Capital, drew attention to the implications for RBS's ability to pay out a dividend until after the disposals were made, with an original deadline of January 2013 looming large. Mr Greenwood said: "An extension to the deadline for disposal may still be required. The question to us is not whether this will be granted - we think it will - but whether in doing so the EU will look to impose additional sanctions. For example, an extension to the dividend stopper that recently expired in April 2012, could be one possibility, in our view. RBS missed out on a wider rally in its sector. Lloyds Banking Group, which is in the process of selling part of its business to the Co-Operative Bank in order to meet regulatory requirements after its government rescue rose 1 per cent to 40.1p. Barclays was 1 per cent higher at 234.5p. Standard Chartered was 2.4 per cent higher at 730p and HSBC rose 0.4 per cent to 597.6p. Overall, demand for financials and oil majors helped the FTSE 100 overcome pressure from weaker mining stocks, which tracked further weak economic data out of China. London's benchmark index ticked 0.3 per cent higher to 5,811.12, a rise of 17 points in line with the cautious trade seen across global markets.