Stanchart, RBS talks collapse on valuation

Negotiations between Standard Chartered Bank and the Edinburgh-based Royal Bank of Scotland (RBS) over a proposed sale of the latter’s assets in India, China and Malaysia to the former have collapsed.

Standard Chartered pulled out of the negotiations over valuation issues, according to sources. They say it was willing to pay up to $250 million, a figure that apparently fell far short of RBS’ s expectations.

Standard Chartered and RBS had entered into an exclusivity agreement on the negotiations for sale of assets in the three countries. RBS has 30 branches in India and over 10,000 employees.

While the RBS spokesperson could not be contacted, a StanChart spokesperson in London said the bank would not want to in comment on any specific case. A spokesperson here said, “We do not comment on market speculation.”

The sources said RBS might now split the asset sale further and sell Indian operations separately, instead of clubbing these with China and Malaysia. RBS had earlier sold its retail and commercial banking operations in Taiwan and Indonesia to ANZ.

The divestments are part of RBS Chief Executive Stephen Hester’s efforts to shed what the bank calls its non-core assets. Hester had in February laid out plans to shrink the bank and focus on core strengths.

Without the non-core assets, RBS would be an attractive turnaround story and return to a sustainable return on equity due to its market leading businesses in large markets, Hester had said.