Royal Bank Of Scotland Shares Rise After Asian Disposal
August 04 2009 - 4:53AM
Dow Jones News
Shares in Royal Bank Of Scotland Group PLC (RBS) climbed 3.1%
Tuesday after it confirmed it had raised $418 million from the sale
of some of its Asian operations and said it was in advanced talks
about the sale of its businesses in India and China.
The bank said overnight that it has agreed to sell retail and
commercial banking operations in Taiwan, Hong Kong, Singapore, and
Indonesia and its institutional businesses in the Philippines,
Vietnam and Taiwan to Australia & New Zealand Banking Group
Ltd. (ANZ.AU).
Shares in RBS were up 1.4 pence, or 3.1%, to 48 pence at 0817
GMT, the leading gainer on the FTSE 100. RBS has been among the
hardest hit by the credit crunch and global recession and its
shares have lost more than two-thirds of their value in the last
year.
"The agreement represents substantial progress in RBS' announced
strategic restructuring and allows improved visibility over the
execution time frame, potential value creation and post-crisis RBS
structure," brokerage Shore Capital said.
The sale forms part of dramatic restructuring for the
Edinburgh-based bank, which is now 70% owned by the U.K.
government. It said in February it was bundling its troubled
operations into a non-core unit, equivalent to about 20% of its
total assets, with a view to run down or dispose of them in the
next three to five years.
The $418 million it receives from the sale is $50 million more
than the assets' book value, it said.
"RBS remains in advanced discussions with bidders for the
remaining assets it has decided to sell in Asia and will make
further announcements, as appropriate, in due course," it said in a
statement.
ANZ Chief Executive Mike Smith said his company had decided
against buying the China and India operations due to concerns over
price and a lack of banking licenses.
The U.K.'s Standard Chartered PLC (STAN.LN) is thought to be
among the bidders for the China and India assets.
Standard Chartered Asia CEO Jaspal Bindra said Tuesday that the
bank was in talks with a company to buy some of its assets in India
and China. He declined to name the company or give any details.
RBS said Feb. 26 it was looking to sell businesses in Asia in
order to refocus on a smaller number of key markets.
Company Web site: www.rbs.com
-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278;
michael.carolan@dowjones.com
(Aries Poon and Chester Yung in Hong Kong contributed to this
report.)
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