News Column

RBS mulls sale of Coutts' units outside the UK

August 12, 2014


COUTTS might sell off its overseas arms, RBS told staff yesterday, as the bank looks to cut back its foreign operations even further.

But the famous private bank's UK business will not be sold, whatever happens to the rest of the group.

RBS has refocused its operations on the UK since it collapsed and was bailed out by the government in 2008.

It is in the process of selling off its US bank Citizens, and has shut down or sold much of its operations across continental Europe.

If it decides to sell the overseas parts of Coutts, which has been in the RBS group since 2000, it will be left with few international operations at all.

Those will be retained in its corporate and wholesale units, where it offers businesses trade-related services like foreign exchange products, and works in global capital markets to raise finance for customers.

A memo sent to staff said RBS will "explore options including merging the remainder of the current Coutts International business, considering joint ventures or a sale, thereby reducing RBS's footprint internationally." And the note, from commercial and private banking chief Alison Rose and retail boss Les Matheson, admitted Coutts must change given "compressed margins and the increasing need for scale in international businesses."

Coutts has also been the focus of regulatory attention, with Swiss banks being targeted by US tax authorities looking for information on American citizens, and UK regulators tightening rules on financial advice.

RBS had already cut back some of its other private banking operations - in April City A.M. revealed more than 80,000 customers of the RBS and NatWest private banking service did not use the unit sufficiently, and so were being downgraded to standard inbranch services.

RBS' shares fell 1.74 per cent.

BOTTOM LINE: Page 10 .

.COUTTS: A GUIDE FOR THE UNINITIATED ? Coutts is an exclusive private bank that aims to advise the rich on managing their wealth, as well as offering tailored loans and finance.

? Most famously it is the Queen's banker. It also has a cash machine next to Eton, Princes William and Harry's old school. ? In Coutts' case, new customers need investable assets of 1m or more to join up - and excluding the value of your home.

? The bank traces its history back to 1692 - when a Scottish goldsmith banker, John Campbell, set up shop on the Strand. ? This was two years before the Bank of England was established.

? It took the Coutts name in 1755, and merged with the National Provincial & Union Bank after the First World War. That became part of NatWest in 1969, which was in turn taken over by RBS in 2000.

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Source: City A.M. (UK)

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