News Column

RBS Considering Sale Or Joint Venture For Coutts International

August 11, 2014

Samuel Agini

LONDON (Alliance News) - Royal Bank of Scotland Group PLC Monday said that it's considering options for the international arm of its Coutts private bank, including a possible sale or joint venture, although it will continue providing wealth management services to its UK resident non-domiciled clients.

According to a memo sent to staff on Monday morning, RBS has already achieved a "major restructuring" of the international high net worth business, but said it faces a "challenging path" to achieve its target for return on equity due to compressed margins and the increasing need for scale. The memo said that a review of its high net worth business confirmed that it should restructure its Coutts International business.

"A key consideration will be to continue delivering wealth management capabilities to our UK Resident Non Domiciled Clients with suitable offshore booking capability to support. We will now 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 RBSís footprint internationally," the memo said.

The provision of wealth management services to residents in the UK who aren't UK nationals currently comes under Coutts UK.

In February, RBS outlined plans to achieve a 15% return on equity in each business by focusing on its strengths in the UK. Under that decision, RBS decided to bring its private banking businesses together with its commercial business. A subsequent review of its high net worth business has supported a "substantial increase" in the bank's focus on growing its UK side of the business, the memo said.

The UK represents 59% of customer assets and liabilities and 65% of revenues in the high net worth business, while the international business represents the remainder.

RBS shares were Monday quoted down 1.5% at 340.28 pence.

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Source: Alliance News

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