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RBS In Talks To Sell Asset Management Arm, No Plans To Divest Coutts - Report

Wendy Spires Assistant Editor 19 May 2009

RBS In Talks To Sell Asset Management Arm, No Plans To Divest Coutts - Report

Royal Bank of Scotland is considering selling the asset management division which invests on behalf of the clients of Coutts, its subsidiary UK private bank, according to The Sunday Telegraph.

RBS Asset Management, which manages money for high net worth and institutional investors, had $50 billion of assets under advice at the end of 2008 and is estimated to be worth £500 million.

According to the report, RBS has discussed the potential sale of its asset management business with advisors including Morgan Stanley. The publication added that although RBS had received "unsolicited" approaches from parties interested in buying Coutts, it has no current plans to sell the private bank.

RBS declined to comment on the report when contacted by WealthBriefing.

Market speculation that RBS will look to sell Coutts has grown since the UK government partly nationalised RBS after the bank suffered massive losses stemming from the credit crisis. The bank has been carrying out an extensive review of its operations under Stephen Hester, RBS’s group CEO.

The prestige of Coutts - of which Queen Elizabeth II is a client - would make the private bank an attractive acquisition for a number of firms, but equally the cachet of the Coutts brand is such that RBS could understandably view a divestiture with reluctance. 

RBS’s UK wealth management division, which includes Coutts, recorded an operating profit of £82 million in the first quarter of this year, down from £104 million in the same period last year.

The UK wealth division logged total income of £188 million in the latest quarter, down from £210 million a year before. Assets under management, excluding deposits, fell by 20 per cent over the year to £15.1 billion.

For the group as a whole, RBS reported a first-quarter loss attributable to ordinary shareholders of £857 million, compared with an equivalent profit of £245 million a year before.

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