RBS starts 'non-core' disposals with $550m Asia sell-off deal

Published on Tuesday 4 August 2009 21:44

ROYAL Bank of Scotland kicked-off the sale of its "non-core" assets yesterday by agreeing a $550 million (£327m) deal with Australia & New Zealand Banking Group for a swathe of Asian businesses.

The sale includes RBS's retail and commercial banking operations in Taiwan, Hong Kong, Singapore and Indonesia – and comes ahead of the Scottish bank's interim trading results on Friday.

RBS is also understood to be on the brink of selling its retail and commercial banking businesses in India, China and Malaysia to Standard Chartered Bank for between $220m and $250m.

As part of yesterday's deal, ANZ will also acquire RBS's wholesale banking operations and global transaction services (international corporate payments) in the Philippines, Vietnam and Taiwan.

RBS said the price represented a $50m premium for control on top of the book value – the basic value of the assets – of the businesses being sold.

A UK banking analyst said: "This doesn't seem a bad price for RBS, and Stephen Hester (RBS's chief executive] will also welcome the lack of senior management diversion to assets he no longer sees as core at the Royal."

The purchase gives ANZ access to 54 branches across Asia with $3.2bn in loans and $7.1bn in deposits. It takes Australia's fourth biggest bank closer to its goal of getting 20 per cent of its revenue from Asia by 2012.

Ben Potter, IG Markets' Sydney-based banking analyst, said: "This is a solid outcome for ANZ that consolidates its growth strategy into Asia and gives added credence to its ambitions of becoming a regional powerhouse."

Hester said in February that RBS's retail and commercial banking operations in Asia were now deemed "non-core" as the part-nationalised bank sought to slim its balance sheet and focus on fewer markets.

The Scottish bank confirmed yesterday it remained in advanced talks with bidders for the remaining assets it has decided to sell in Asia. These include RBS Pakistan where four potential bidders are known to have thrown their hats in the ring via regulatory announcements in that country.

RBS is to keep an investment banking business in 11 markets in Asia.

The bank is expected to report a modest headline profit, including exceptional gains, this Friday following a 692m loss at this time last year.

Meanwhile, Standard Chartered unveiled a surprise 1 billion market fundraising yesterday following its 1.8bn cash call late last year.

Standard Chartered chief executive Peter Sands said the latest share placing was "absolutely not" to build a war chest for a big acquisition, but was to give the bank firepower to capitalise on opportunities as Asian economies recovered. Sands confirmed the bank was in talks about acquisitions in China and India that would cost "low hundreds of millions of dollars".