ROYAL Bank of Scotland has formally kick started the auction for private banking operation Coutts International, with sources suggesting the prospectus has been issued to at least 10 suitors.
ROYAL Bank of Scotland has formally kick started the auction for private banking operation Coutts International, with sources suggesting the prospectus has been issued to at least 10 suitors.
The bank, which is 81 per cent owned by UK tax payers, expects to receive first round bids for the business before Christmas.
Swiss banks Credit Suisse and Julius Baer, and Kuala Lumpur-based Malayan Banking Berhad, are among those invited to take part on the auction, which could net RBS about $1 billion (£640m).
However the prospectus does not extends Coutts?? UK division, whose clients famously include the Queen, footballers and celebrities.
Coutts?? UK operation is being more closely integrated within the bank??s UK divisional structure, along with private banking and wealth management business Adam & Co.
The strategy follows a review of the Coutts business, unveiled in August, which has led to RBS seeking bids for the international component.
Under chief executive Ross McEwan, RBS has whittled what were formerly seven divisions down into three. The strategy has seen its commercial and private banking operations come together under a plan to streamline RBS into a UK-focused retail bank.
Sources suggest RBS and adviser Goldman Sachs have issued sale documents for Coutts International, which manages about $36 billion (£24m), to companies such as Singapore lenders DBS Group Holdings and United Overseas Bank, Societe General and Bank J Safra Sarasin.
BNP Paribas and Canada??s Bank of Montreal have also been linked with potential bids.
However RBS said it was unable to say who the bid documents have been issued to.
Bids are being sought for the international arm of Coutts in its entirety, but there has been speculation that RBS may consider breaking it up into two divisions ?? Europe and Asia ?? in order to drive up the price and maximise shareholder value.
Previous reports have suggested the strategy has merit because it would entice potential bidders in the Far East who would otherwise be discouraged due to a crack down on tax evasion in Europe.
It was suggested potential bidders in Singapore and Japan may be reluctant to take on exposure to European clients who could face tax investigations.
Around 40 per cent of Swiss-based Coutts International??s clients are based in Asia, with the rest in Europe and the Middle East.
Should RBS decide to sell the business in one chunk, it is thought the Swiss private banks would be in the driving seat.
RBS is understood to prefer an outright sale, but would consider bids for chunks of the business if it represented shareholder value.
Coutts International employs about 1200 staff across operations in Switzerland, Singapore, Hong Kong, Monaco, India and Qatar.
Founded on the Strand in London by a Scottish goldsmith in 1692, it has been part of RBS since the group's takeover of NatWest in 2000.
In November Italy's biggest retail bank, Intesa Sanpaolo, was reported to be trying to acquire Coutts in its entirety. It is reputedly looking to deploy capital after it emerged as one of the eurozone's strongest banks following the latest stress tests carried out by the European Central Bank.
RBS declined to comment on the Coutts International sale process.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article