A proposed sale of 318 branches and other interests by Royal Bank of Scotland to Santander has collapsed.
The Spanish bank pulled the plug on the sale, saying that the deal could not be completed by the revised deadline.
RBS chief executive Stephen Hester said on Friday a new buyer would be sought.
The sale was ordered by the European Commission in return for a £45 billion rescue of the bank by the British government.
RBS had been working on the sale for more than two years.
The BBC reports a preliminary deal with Santander to sell the branches and the business of 1.8 million customers was struck in August 2010. However, completion has been delayed several times.
The assets being sold included the RBS branch business in England and Wales, and the NatWest branch business in Scotland, plus some small business and other corporate lending interests.
One problem for Santander is thought to have been trying to integrate the banks' computer systems, an issue that has dogged other mergers and acquisitions in the financial sector.
The BBC reports there were also suggestions earlier this year that Santander was trying to negotiate a lower price for the acquisition, which was initially thought to be worth £1.6 billion.
The EU required RBS to complete the sale by 2014.
However, Santander said it had pulled out of the deal after it became apparent that a revised deadline for completion would not be met.