Buyers wait in wings for RBS, Lloyds assets sell-off

Britain's bailed-out banks could both be on course to sell assets in the months ahead after a top financier indicated he was preparing a bid for Royal Bank of Scotland's aircraft leasing arm.

Guy Hands, the Guernsey-based investor, is considering a swoop on RBS Aviation Capital.

While Hands mulls his approach, Lloyds Banking Group chief executive Antonio Horta-Osorio is preparing next month to name a preferred bidder for the 630 branches his bank is being forced to sell.

RBS's plane-leasing division is thought to be worth about 4 billion and was originally put up for sale in 2009 following RBS's state bail-out. A planned auction was cancelled as the recession hit the aviation industry and dampened buyers' appetite for the business.

But, with air travel growing again, Hands said he was "tempted" to buy the division and merge it with Irish rival Awas, which he already owns through his Terra Firma investment fund.

Hands and Terra Firma were damaged both financially and in reputation when a 4bn take over of music label EMI went sour after the credit crunch.

The music publisher was seized by its banker, Citigroup, after failing to keep up with loan repayments in a move that cost Terra Firma 1.75bn.

If sold, RBS Aviation Capital would be the largest disposal since the bank started looking to cut its size by selling assets following its bailout.

Meanwhile, Lloyds is progressing with the forced sale of 630 branches at a rapid pace, as its new chief executive is apparently keen to put the matter to rest and move on.

The bank, 41 per cent owned by the taxpayer, has been given a November 2013 deadline by the European Union to sell off assets including 185 Lloyds TSB branches in Scotland, 250 Lloyds TSB branches in England and Wales and 164 Cheltenham & Gloucester branches.

Although the process is likely to take time even after contracts are signed, Lloyds seems to be moving to dispose of the branches - which are being sold along with part of the group's mortgage book and would together form Britain's seventh biggest bank in their own right - well before that date.

It is thought Horta-Osorio sees a quick sale as a potential public relations coup that could head off calls for the giant bank to sell even more of its assets.

The Independent Commission on Banking said that the bank's asset sale should be "substantially enhanced" above the level forced upon it by EU competition regulators.

Today is the deadline for initial offers on the 630 branches, with Sir Richard Branson's Edinburgh-based Virgin Money and banking takeover vehicle NBNK Investments regarded as certain to be among those who make it through to the second round of the sale process.

Clydesdale Bank owner National Australia Bank was also thought to be considering a bid.

Sources close to the auction told The Scotsman's sister paper, Scotland on Sunday, that the second stage of the sale has now been brought forward to later this month, when Horta-Osorio wants to whittle down the suitors to a couple of head-to-head rival buyers.

Horta-Osorio is understood to want to have a preferred buyer by the end of August, and hopes to have contracts signed before the end of the year.