RBS accelerates plans to reduce non-UK operations

By Nicole Miskelly | 12 January 2015

Royal Bank of Scotland (RBS) is in talks over a potential retreat from Asia in a bid to accelerate its strategy to remove a number of non-UK and investment banking operations.

The Financial Times (FT) reports that the decision to move away from the Asian market is a result of severe restructuring put in place by Ross McEwan (Chief Executive, RBS) who took over in October 2013, and aims to reduce the banks non-UK activities to less than a quarter of its assets.

According to the FT, McEwan visited the banks Asian operations last week and held meetings in Singapore to discuss options for retreating from the region. The meeting was first reported on by Bloomberg but RBS has since declined to comment.

The bank, which has been present in Asia since the 1820s, employs around 2,000 people in Asia and provides large corporate clients with interest rate and commodity trading, foreign exchange, debt capital markets, financing services and financial advisory.

According to the FT, the discussions come only a month after it was reported that following six years of losses in Japan, the bank plans to reduce its fixed-income trading business in the country. RBS also has operations in China, Hong Kong, Indonesia, India, Malaysia, Taiwan, Thailand and Australia but plans to keep some fixed-income sales and trading capacity in its main Asian hub, Singapore.

RBS which is a state-controlled bank and is 80 per cent owned by UK taxpayers, aims to become more like its rival Lloyds Banking Group and is likely to withdraw from more than 50 percent of the 38 countries it currently operates in.

Since the height of the banks pre-crisis expansion, it has already retreated from around a dozen countries and is currently seeking bids for the non-UK operations of its private bank, Coutts.

Last month RBS also said it was considering an exit from the Middle East and Central and Eastern Europe. It is also in the process of separating its retail banking operation, Citizens, under an agreement with the European Commission to sell its remaining 75 per cent share by 2016.  

 

By Nicole Miskelly, bobsguide Lead Journalist

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