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Royal Bank of Scotland Group Plc will outline plans on Thursday to reduce the number of countries in which it operates by two-thirds to 13, a person with knowledge of the matter said.
Executives in markets affected will brief regulators and clients after the board meets on Wednesday to approve the plan, the person said, asking not to be named before an announcement to staff. As part of the restructuring, code-named Project Brown, Edinburgh-based RBS intends to sell its US loan commitments and related derivatives to Mizuho Financial Group Inc, the person said without elaborating.
James Abbott, a spokesman at RBS, declined to comment, as did Masako Shiono, a spokeswoman for Mizuho in Tokyo.
Chief Executive Officer Ross McEwan, 57, is shrinking the Edinburgh-based lender, cutting jobs and assets outside of the UK to help reverse losses, increase the focus on consumer banking and return the taxpayer-owned lender to full private ownership. RBS sought bids for its Coutts International private bank and raised $3 billion in September selling shares in its US subsidiary, Citizens Financial Group Inc.
RBS will retain trading operations in the UK, the US and Singapore, a sales team in Tokyo and coverage teams in the Netherlands, Germany, France, Italy, Spain, Sweden, Denmark, Finland and Norway, according to the person.
The lender plans to sell or wind down its businesses in markets including China, Hong Kong, Indonesia, Malaysia, South Korea, India and Thailand, the person said.
The stock fell 0.9 per cent to 400.3 pence at 12:35 pm, still below the 407 pence at which the government says it would break even on its £45.5-billion ($70.5 billion) bailout in 2008 and 2009.
Rory Cullinan will outline details of Project Brown to employees on Thursday, the person said. In a management reshuffle, Cullinan was appointed as head of RBS's securities division, replacing Donald Workman, a person with knowledge of the matter said Tuesday.
McEwan is set to report earnings on the same day, giving investors a chance to assess his progress in repairing the government-owned bank's balance sheet and returning it to profit. A person familiar with the process said earlier this month that RBS had firmed up plans to sell or wind down its Asian corporate banking business within months.
Mark Bailie, co-CEO of RBS Capital Resolution - the entity set up to hold assets the bank wants to divest - will lead the process of selling or shuttering the businesses RBS is exiting, according to the person. Bailie, who will become sole CEO of RCR, will meet in Singapore next week with the bank's country heads from across Asia as part of his expanded duties, the person said.
Annual loss?
RBS on Thursday may post its seventh consecutive annual net loss since the financial crisis, as it writes down the value of its US consumer unit.
Net income will be £2.2 billion, according to the average estimate of 15 analysts surveyed by Bloomberg. However, the bank will have a £4-billion goodwill writedown, a person with knowledge of the matter said on Friday, which isn't included in the analyst predictions. RBS will also name Howard Davies, the former head of the UK's now defunct Financial Services Authority, as chairman, the Financial Times reported on Monday.
