News Column

UK MIDDAY BRIEFING: RBS Mulls Sale Of Coutts International

August 11, 2014



LONDON (Alliance News) - Royal Bank of Scotland Group 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 RBS's footprint internationally," the memo said.



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Markets: UK stocks have started the week strongly, following on from a positive session in Asia and a strong turn around in US stocks at the end of last week, as investors weigh up political events. Over the weekend, there was no worsening in the tensions over Ukraine, a ceasefire between Hamas and Israel is currently holding, while the US has moved to help out in northern Iraq.



US equities futures are currently pointing to a higher open on Wall Street.



FTSE 100: up 0.8% at 6,620.40

FTSE 250: up 1.2% at 15,431.81

AIM ALL-SHARE: up 0.4% at 752.34

GBP-USD: flat at 1.6778

EUR-USD: down at 1.3394

GOLD: flat at USD1,310.20 an ounce

OIL (Brent): up at USD104.85 a barrel

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Other Top UK Corporate News

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Balfour Beatty said it has "lost confidence" in a successful merger with Carillion and has concluded that it is in its best interest to continue with its current plan to refocus and simplify the group, including the sale of its US project management business Parsons Brinckerhoff. Balfour Beatty, which also published its first-half results ahead of schedule Monday, said it has terminated discussions after Carillion revised its proposal to demand that Parsons Brinckerhoff remain part of Balfour Beatty. In response to Balfour Beatty's statement Monday, Carillion said it will give further consideration to its position and will make a further announcement in due course. "In the meantime, there can be no certainty that any offer will be made by Carillion or as to the terms on which any such offer might be made," the company said. The announcements came as Balfour Beatty posted pretax profit of GBP22 million for the six months to June 27, down from GBP47 million a year earlier, as revenue fell to GBP4.17 billion, from GBP4.31 billion.

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Blackstone Group is understood to be close to securing a deal to acquire Royal Dutch Shell's stake in a massive gas field in Louisiana, US, The Wall Street Journal reported, citing sources familiar with the matter. The deal could value Shell's 50% stake in the Haynesville field at more than USD1 billion, according to the sources, and comes as private equity firms continue to buy up unwanted shale gas stakes held by oil companies, the newspaper said.

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Synthomer saw its shares rise after it raised its interim dividend by 25%, despite reporting a fall in both sales and profit in the first half of its financial year, hit by weakness in Asia. The speciality chemical company reported a pretax profit of GBP45.0 million for the six months to June 30, compared with GBP48.6 million a year earlier, as revenue in the period fell to GBP510.1 million, down from GBP558.3 million in the first half of last year. It said revenue and profit were hit by significant weakness in the Asia and Rest of World region. Despite the fall in both profit and revenue, Synthomer raised its interim dividend by 25% to 3.0 pence. "Given the strong cash generative nature of our business, the board has today updated the group's dividend policy, increasing the level of cash returns for shareholders," said Chief Executive Adrian Whitfield in a statement.

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Mitie Group reports a "positive" start to its new financial year, with organic revenue growth driven by new and expanded contracts. The outsourcing firm said that it had secured 90% of its budgeted revenue for the current financial yea, as at June 30, slightly higher than at the same point a year last year, although it said the phasing of the contracts will be weighted towards the second half of the year. Mitie's current financial year ends March 31, 2015.

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Workspace Group said it has secured planning permission for its redevelopment project in Hayes, a 50:50 joint venture with Polar Properties. The London real estate investment trust said that the redevelopment of Enterprise House, within which its interest was valued at GBP3 million at the end of March 2014, will provide 98 apartments and a 38,000 square foot business centre for creative industries.

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AIM MOVERS

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Amur Minerals Corporation is up after it said its making progress in getting a production licence for the Kun-Manie deposit in the Amur region of Russia. It said Russian authorities have issued a lower calculation of the one-time payment for the forthcoming mining licence, now USD655,000, down from USD818,000 previously. Westminster Group is another gainer after its joint venture with CWind signed a memorandum of understanding with an African government ahead of signing a long-term provision of a sea ferry transfer service. Roxi Petroleum is up after the firm said it had found a deep discovery at its flagship BNG asset in Kazakstan. Christie Group is also up afetr its Christie + Co agency and advisory services subsidiary successfully brokered the sale of 11 QMH UK Ltd hotels. Jubilee Platinum is higher after its Tjate Platinum Corporation Proprietary subsidiary submitted its Environmental Impact Assessment and Environmental Management Programme to South Africa'sDepartment of Mineral Resources for the Tjate platinum mine project. It also said that it is progressing towards the sale of Quartzhill farm, which is expected to generate gross sale proceeds of GBP4.1 million, while its Middleburg Operations sustained positive earnings for July in spite of the challenges faced at smelter operations due to the national labour strikes by employees affiliated to the National Union Of Metal Workers of South Africa.Bellzone Mining is a heavy faller after it said that it has been unable to secure long-term financing but that it is currently in talks with China Sonangol International in relation to the provision of a short term loan. Totally is also down after it raised GBP400,000 before expenses by issuing 80 million new shares with new and existing investors at 0.5 pence per share. It said the placing price represents a 20% discount to its closing mid-market price on August 8. The funds will be used for its healthcare business.

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Top Economics And General

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Iraq's embattled Prime Minister Nuri al-Maliki Monday won the backing of the country's top court in his efforts to gain a third term in office, state television reported. The broadcaster said the Federal Supreme Court ruled that al-Maliki's State of Law Coalition was the largest parliamentary bloc - meaning that President Fouad Massoum will be obliged to task al-Maliki with forming a new government. The report came hours after a midnight speech by al-Maliki, a Shiite, in which he said he would take Massoum to court for violating the constitution by failing to nominate him. The Islamic State jihadists have meanwhile won further gains against Kurdish forces at the eastern end of their front line, Baghdad-based Alsumaria news reported. IS overnight took control of most of Jalula district, where it has been locked in battles with the Kurdish Peshmerga since mid-June, the report said, quoting a local police source.

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US President Barack Obama on Saturday announced an open-ended military campaign against Islamic militants threatening Kurds and other minorities in northern Iraq. US airstrikes "successfully destroyed arms and equipment" used by the radical Islamic State militants, Obama said. The Iraqi government also said it was cooperating with Kurdistan's autonomous region against the common threat. Britain made air deliveries of relief supplies to thousands of Yezidis besieged on Sinjar Mountain by the jihadists. Two Royal Air Force C130s delivered water for 2,400 families and 500 solar lanterns that can be used to recharge mobile phones, the British Department for International Development said.

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Western leaders over the weekend warned Russia against military intervention in eastern Ukraine, as pro-Russian separatists there suffered more setbacks. US Secretary of State John Kerry told Russian Foreign Minister Sergei Lavrov in a phone call that "Russia should not intervene in Ukraine under the pretext of "peacekeeping," the State Department said. Ukraine said on Saturday that a huge Russian "humanitarian convoy" with peacekeeping soldiers had advanced to the border in order to provoke "all-out conflict." The Kremlin denied that any of its troops had attempted to cross into Ukraine.

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Israeli negotiators arrived in Cairo on Monday for indirect talks mediated by Egypt on a long-term truce for the Gaza Strip, as a temporary three-day ceasefire was taking hold. The Israeli team, including Shin Bet security service chief Yoram Cohen and the head of the Defence Ministry's political and security bureau Amos Gilad, was meeting Egyptian security officials who are mediating the talks with a multi-faction Palestinian delegation. A military spokeswoman in Tel Aviv told dpa that no violations were recorded after the fresh 72-hour ceasefire went it effect just after midnight local time.

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Consumer prices in China were stable in July, providing ample room for the authorities to roll out more measures to support the economy, official data showed Saturday. The CPI, a main gauge of inflation, rose by 2.3% on year in July, unchanged from last month, the National Bureau of Statistics said. The index also matched economists forecast, but remained below government's annual target of 3.5%. On month, the consumer prices grew 0.1%, after falling 0.1% a month earlier.

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Ireland's construction sector activity expanded at a fastest rate in three months in July as new orders rose at the strongest pace since late 2004, survey data from Markit Economics showed. The Ulster Bank purchasing managers' index, or PMI, for the construction sector rose to 62.6 in July from 59.9 in June, the sharpest increase in three months. This marked the eleventh straight month of expansion in activity. A reading above 50 signals growth in construction activity.

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The Bank of Japan said the economy is set to continue its moderate recovery trend as the effects of sales tax hike are expected to wane gradually. Further, in its monthly report, the central bank said exports are likely to head for a moderate increase mainly against the background of the recovery in overseas economies. According to BoJ, public investment will continue leveling off more or less at a high level. Business fixed investment is projected to follow a moderate increasing trend as corporate profits continue their upward momentum.

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At least two people were killed and dozens injured when a powerful typhoon slammed into western Japan Sunday, bringing torrential rains and strong winds, reports said. One woman was found dead in a rushing stream on the south-western island of Shikoku. A man also died after being swept away by a swollen river in central Japan, the Kyodo News agency reported. More than half a million residents had been ordered to evacuate their homes late Saturday in western regions where mudslides and flooded rivers were reported.

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Two more people have been infected with Ebola in Nigeria, the authorities say, bringing the total number of cases there to nine as the outbreak spreads through West Africa. All the infected patients are in hospital in Lagos, Health Minister Onyebuchi Chukwu announced late on Sunday. Two people have died of Ebola in Nigeria.

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Afternoon Watchlist (all times British Summer Time)



No events scheduled



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Tuesday's Key UK Corporate Events



Ladbrokes Half Year Results

Prudential Half Year Results

SIG Half Year Results

Serco Half Year Results

Just Eat Half Year Results

Volution Trading Update

Al Noor Hospitals Group Half Year Results



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Tuesday's Key Economic Events (all times British Summer Time)



00:01 UK BRC Retail Sales Monitor

00:50 Japan Domestic Corporate Goods Price Index

All Day G20 Meeting

05:30 Japan Industrial Production

07:45 France Current Account

09:00 Italy Consumer Price Index

10:00 Germany ZEW Survey - Economic Sentiment

10:00 EU ZEW Survey - Economic Sentiment

12:30 US NFIB Business Optimism Index

13:55 US Redbook index

16:30 US 4-Week Bill Auction

19:00 US Monthly Budget Statement



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Contact: +44 203 668 7440; newsroom@alliancenews.com; @AllNewsTeam






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