One of the key conditions of RBS' 46 billion bailout is on the brink of failure

RBS' sale of its Williams & Glyn unitone of the key conditions it is required to fulfill after receiving a 46 billion bailout during the heart of the financial crisiscould be about to failafter Santander pulled out of negotiations to purchase it.Talks between the two banks fell through after they failed to agreeon a price for the sale of the Williams & Glyn network, the Financial Times reported on Tuesday evening citing "people briefed on the process."The business includes around 1.8 million personal banking customers and 250,000 small business accounts.Williams & Glyn was originally valued at around 1.9 billion, but it seems as though Santander is unwilling to pay that much. There is small hope for RBS that Santander could come back with another offer. "At the right price, we'll do the transaction," a person close to Santander told the FT.This is not the first time that Santander has attempted to buy Williams & Glyn without any success. In 2012, the bank pulled out of a deal at the last minute because of fears about losing customers and a breakdown in IT. That deal was rumoured to be worth around 1.65 billion.RBS must find a buyer for Williams & Glyn and complete the sale before the end of 2017, or could face a substantial fine, or a forced sale of the business by the European Commission.The Commission mandated that Williams & Glyn must be divested from RBS' core business as a condition of the bailout it received during the financial crisis, when the British government stepped in to prevent the lenderwhich at one point was the biggest bank in the world in terms of total assetsfrom collapsing.RBS' chief executive Ross McEwan has said in the past that it must sell W&G as a condition of returning excess capital and dividends to investors.RBS is still almost three-quarters owned by the British government, despite the government gradually selling off small portions of the bank in the past two years.Shares in Santander seem largely unaffected by the news, and around 9:25 a.m. BST (4:25 a.m. ET) Santander has picked up by around 2.1%. RBS on the another hand, has taken a leg down on the news, dropping 1.55%. At the open, shares gained 1.3%, but have since slipped substantially. Here's how RBS looks:Join the conversation about this storyNOW WATCH: KRUGMAN: Financial markets aren't taking a Trump victory very seriously
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