Malaysia's CIMB to buy part of RBS biz in Asia-Pacific

Malaysian lender CIMB is set to buy a part of Royal Bank of Scotland’s (RBS) wholesale banking businesses in the Asia-Pacific region, including India.

RBS will sell its cash equities, equity capital markets and mergers and acquisitions (M&As) businesses in India as part of the transaction.

“The principal benefit of RBS in the sale is to mitigate partially the shutdown costs otherwise associated with these businesses. The cash consideration, based on net asset values, is expected to be around £75 million. The transaction will complete by jurisdiction with the final completion expected to occur during the fourth quarter of 2012,” RBS said in a statement.

The Scotland-based group will continue its debt financing, risk management and transaction services operations in 11 Asia-Pacific markets.

RBS had said in January it would exit some of its businesses, including cash equities, corporate broking, equity capital markets and M&As, as part of changes in its wholesale banking strategy.

The bank will sell its cash equities business to CIMB in India, Australia (excluding the interest in RBS Morgans), China, Hong Kong and Taiwan, including the cash equities sales desks in the US and UK. It’ll also sell the equity capital markets, and M&As businesses in India, Australia, China (excluding activities carried out by Hua Ying Securities), Hong Kong, Indonesia, Malaysia, Singapore, Taiwan and Thailand. “We are pleased to reach an agreement with CIMB on the transfer of these businesses over the course of 2012. With this transaction, we have now completed the sale process for various elements of the businesses we designated for exit in January,” Bruce Van Saun, group finance director at RBS, said in the statement.

RBS is also in the process of selling its retail and commercial banking businesses in India to hsbc. The deal is yet to be approved by the Reserve Bank of India.