RBS considers $1 billion sale of Coutts

Royal Bank of Scotland is considering selling the international arm of its private bank, in a deal which could net it as much as $1 billion (€750m), as the British government leans on it to focus more on domestic lending.

The move means that Coutts, founded in the 18th century and best known as banker to the Queen of England, could be split into two businesses - one based in Britain and one in Zurich from where it runs operations in Hong Kong, Singapore, Abu Dhabi and Dubai that manage nearly $36 billion in client assets.

RBS has attracted a variety of offers from a range of bidders including unnamed Asian and North American parties for Coutts International, it’s understood.

The sale could net RBS between $720 million and $1.1 billion, based on a multiple of 2 to 3 per cent of assets under management. The bank told staff today that it was exploring a sale.

"We will...work with local management teams to explore options including merging the remainder of the current Coutts International business, considering joint ventures or a sale, thereby reducing RBS's footprint internationally," RBS executives Alison Rose and Les Matheson wrote in a memorandum seen by Reuters.

RBS is 81-per cent owned by the state following a £45 billion rescue operation post-financial crisis and is now under pressure to focus on loans to UK households and businesses and help support the country’s economic recovery. It has undergone a major restructuring in order to pay back taxpayers’ funds and eventually return to private ownership, and appeared a step closer to doing both after it posted a surprise £1 billion quarterly profit recently.

Reuters