RBS scouting for new bidders to sell Asia units

Move comes after its talks with StanChart failed over valuation.

Royal Bank of Scotland (RBS) on Monday said that it was in talks with potential buyers for the sale of its retail and commercial banking businesses in some Asian markets, including India, where it still operated as ABN Amro.

The statement came two days after its talks with Standard Chartered Bank collapsed over valuation of RBS units in India, China and Malaysia. Earlier, ANZ acquired RBS assets in certain Asian markets but decided to keep the three markets outside the scope of the deal.

“RBS is in ongoing discussions with bidders for the remaining assets it has decided to sell in Asia and will make further announcements, as appropriate, in due course,” a bank spokesperson said in response to a questionnaire from Business Standard.

 

The Edinburgh-based spokesperson, however, declined to identify the players with whom RBS was in talks.

While Standard Chartered had offered to acquire the assets for $250 million (around Rs 1,200 crore), RBS was said to be asking for over $300 million, sources associated with the talks had told Business Standard on Friday evening.

The valuation being offered by the likes of Standard Chartered and ANZ factored in the absence of permission to transfer branches to the acquirer. With no branches being transferred, ANZ decided to pursue a banking licence in India.

Standard Chartered and Edinburgh-based 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 on account of the 2007 acquisition of the Asian operations of ABN Amro Bank. The sale would have affected around 2,500 employees since around 7,000 worked for RBS India back office.

Sources said RBS might now split the asset sale further and sell Indian operations separately, instead of clubbing these with China and Malaysia.

RBS is selling or shutting businesses in two-thirds of the 54 countries in which it operates after posting record losses last year.

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 operations of the bank and focus on core strengths.

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