According to a person familiar with the situation, who asked not to be named because the negotiations are still private, Royal Bank of Scotland Group Plc is considering a sale of a major part of its Asia-Pacific business.
The person reported that RBS Chief Executive Officer, Ross McEwan, was scheduled to have several meetings in Singapore in order to think over different ways that will help him downsize the banks business located in Asia. A spokesman of RBS refused to make any comments.
McEwan has presented a plan, which is to ensure that a total of 80% of the banks assets are located in the U.S. The Chief Executive Officer has been trying to dispose of some RBS divisions outside the U.K., so that the lenders main focus remains on its domestic market. McEwan has also been trying to make up for the six consecutive annual losses, reported by the bank.
The potential departure from Asia comes at a moment when the RBS is trying to accelerate its strategy of turning to its domestic market. At present about 2 000 people are employed by the bank in Asia. They work primarily with corporate customers and provide them with foreign exchange, interest rate and commodity trading services. RBS also offers financial advisory and bank financing services to its Asian customers.
Currently the RBS has operations located in China, Thailand, Taiwan, Hong Kong, India, Indonesia, Malaysia and Australia. The bank is said to keep some of its fixed-income sales and trading operations in Singapore, where its main Asian hub is.
Joseph Dickerson, an analyst at Jefferies International Ltd, commented on the rumours of the banks disposal of some of its Asian operations for Bloomberg: “This is consistent with their strategic plan to scale back a number of geographies in which they operate. Outside of the U.K., the company will continue to operate in some markets where it feels like it can generate appropriate returns and isn’t too much of a distraction for management.”
Royal Bank of Scotland Group Plc was up 0.98% for the day to trade at GBX 372.10 per share as of 8:36 GMT, marking a one-year gain of 1.11%. The company is valued at GBP 42.16 billion. According to the Financial Times, the 24 analysts offering 12-month price targets for Royal Bank of Scotland Group Plc have a median target of GBX 382.50, with a high estimate of GBX 500.00 and a low estimate of GBX 250.00. The median estimate represents a 3.80% increase from the last price of GBX 368.50.
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