Less than meets the eye

23 April 2009 By John Foley Follow @johnsfoley

Why is the UK bank taking so long to sell its Asian business? Maybe because the assets in question are disparate and small. RBS’s preference for selling them in one go reduces the pool of buyers and increases the red tape. The $1bn pricetag look optimistic.

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Royal Bank of Scotland announced its firstquarter results on May 8, but gave no new information on the progress of its sale of various Asian units. Stephen Hester, RBS's chief executive, said interest had been encouraging but added that the pace of asset reduction will be slowed by the duty to protect shareholder value until markets normalise.

RBS, which is majority owned by the UK government, aims to sell its Asian retail businesses in eight countries, including some wholesale lending operations. The assets have a book value of E390m ($530m), according to a person familiar with the situation.

Bidders are understood to be HSBC and Standard Chartered, both joint UKHong Kong listed lenders, and ANZ, the Australian bank. The assets for sale include 28 retail branches in India, where opening of new branches is limited by the allocation of licences by the local banking authorities.

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Less than meets the eye

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