This article has been adapted from our sister site across the pond, Fool U.K.

Given the news that emerged this weekend, there are sure to be interesting times in store for bank shareholders, especially those of bailed-out U.K. banks Royal Bank of Scotland (NYSE: RBS) and Lloyds Banking Group (NYSE: LYG).

Everyone expects the Spanish acquisition!
As a condition of approving state aid for Royal Bank of Scotland, the European Commission ordered the 84% taxpayer-owned bank to put up for sale 318 branches outside Scotland, plus its Williams & Glyn brand.

A number of financial firms and consortiums put forward bids for these RBS assets. The first well-known name to drop out was Virgin Money, which had teamed up with U.S. billionaire Wilbur Ross.

Now it appears that National Australia Bank, owner of Clydesdale Bank and Yorkshire Bank, has also pulled out. According to weekend news reports, NAB withdrew from the RBS auction on Friday, just 10 days before the June 14 deadline for submitting bids.

Spanish bank Santander (NYSE: STD) is now the front-runner to clinch a deal to buy the RBS assets. Santander already owns the Abbey, Alliance & Leicester, and Bradford & Bingley brands, so buying the RBS assets will be just another bolt-on purchase for the acquisitive Spanish giant.

Sources suggest Santander has bid around £2 billion in the RBS auction, but faces competition from its smaller domestic rival Banco Bilbao Vizcaya Argentaria (NYSE: BBVA). However, there is a further twist in this tale: The Sunday Times reported that BBVA is putting together a £2 billion bid to snatch Clydesdale and Yorkshire banks, which National Australia Bank is expected to put up for sale shortly.

Although NAB has owned Clydesdale Bank since 1987 and Yorkshire Bank since 1990 (and has around 2.7 million U.K. customers), it is considering a complete withdrawal from U.K. banking. So, having failed to "double up" by buying RBS's assets, NAB looks set to exit the U.K.

Lloyds sued for £14 billion
In other news, Lloyds Banking Group -- which is 41% taxpayer-owned -- is facing a £14 billion lawsuit from shareholders unhappy with the outcome of the bank's takeover of HBOS.

During the height of the post-Lehman Brothers meltdown in October 2008, the U.K. government pushed ailing bank HBOS into a "shotgun" wedding with the more conservative Lloyds TSB. This merger led to a loss of £14 billion of shareholder value, which the aggrieved Lloyds' owners want back.

About 500 of Lloyds' 800,000 shareholders have already joined the legal action, which begins on Wednesday. As well as suing the bank's directors, the plaintiffs -- Lloyds Action Now -- may also bring a case against HM Treasury.

Their claim alleges that Alistair Darling (the chancellor at the time) and Lloyds TSB's directors failed to reveal crucial information about the state of HBOS's finances in the run-up to its merger with Lloyds. Above all, shareholders were not told until November 2009 about a secretive £25.4 billion government loan made to HBOS in October 2008.

Whatever the outcome of this case (which is surely set to run and run), one group will be rubbing its hands with glee: the highly paid lawyers on both sides!

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Brian Richards prepared this article for publication on Brian does not own shares of any companies mentioned. The Motley Fool has a disclosure policy.