RBS preparing to sell international arm of Coutts -
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[August 11, 2014]
By Katharina Bart and Saeed Azhar
- Royal Bank of Scotland is selling the international
arm of its private bank in a deal that could be valued
around $1 billion, sources said on Monday, as the
British government leans on it to focus more on domestic
The move means Coutts, founded in the 18th century and best known as
banker to the Queen of England, will be split into two businesses -
one based in Britain and the other in Zurich from where it runs
operations in Hong Kong, Singapore, Abu Dhabi and Dubai that manage
nearly $36 billion in client assets.
RBS, which is set to disclose the plans to staff on Monday, has
attracted a variety of offers from a range of bidders including
unnamed Asian and North American parties for Coutts International,
two sources with knowledge of the operation said.
The sale could be net RBS between $720 million and $1.1 billion,
based on a multiple of 2 to 3 percent of assets under management,
said a third person with knowledge of the matter.
A spokeswoman for RBS declined to comment on the news.
RBS is 81-percent owned by the state following a 45 billion-pound
($75.52 billion) rescue operation post-financial crisis and is under
pressure from lawmakers to focus on lending 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 pound quarterly profit recently.
As part of the RBS overhaul, Coutts' international unit, which
employs 1,200 staff, has dramatically cut the number of countries it
RBS said in February that Coutts should sit within RBS's own
commercial and private bank, in order to better connect with that
unit's wealthy entrepreneurs and other potential clients.
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"As part of the transition and integration of this business, we have
been reviewing our private banking business so that it works for the
benefit of our customers," RBS said last week.
Last year, Coutts International's operating profit stood at 103
million francs when stripping out provisions, including for a U.S.
The Swiss arm of Coutts is one of 100-plus Swiss banks who have
reason to believe they may have committed tax offences by helping
wealthy Americans evade taxes - and are eligible for a
non-prosecution agreement if they come clean and face fines.
($1 = 0.5958 British pound)
($1 = 0.9060 Swiss franc)
(With reporting by Matt Scuffham in London; Editing by Sophie
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