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ANZ Confirms Place In Short List For RBS Asset Sale
Australian banking major ANZ, has reportedly made the short list in the bidding for troubled UK banking giant RBS’s Asian assets. The divestment by RBS likely to fetch it US$1.8 billion, whilst the acquirer will obtain a sophisticated portfolio of Asian franchises across the entire region in fast growing emerging markets, such as India.
Last month certain publications reported that ANZ had engaged the investment banking services of Credit Suisse in order to produce a bid. The speculation being derived from ANZ Chief Mike Smith strategy of creating a “Super Regional” lender, one which derives at least 20 per cent of its earnings from overseas markets.
Unsourced reports have said that RBS has appointed Morgan Stanley as its adviser for the asset sale whilst The Asian Wall Street Journal this week reported that HSBC Holdings and Standard Chartered have also been short listed for the transaction. Standard Chartered reportedly being advised by Goldman Sachs.
An ANZ spokesman Paul Edwards said in a statement was one of several parties invited to participate in the sales process.
“ANZ can confirm it has been invited by the Royal Bank of Scotland Group to participate in the sale process for RBS Asia. ANZ understands it is one of a number of parties involved in the RBS Asia sale process. That process is at an early stage and is subject to a number of commercial and regulatory uncertainties. Exploring the opportunity is consistent with ANZ’s strategy to grow in Asia Pacific and create a super regional bank,”
The unsourced report in Business Day suggested that RBS intends to be flexible about the assets sale, which would allow potential buyers to bid for specific parts of its Asian operations, making any potential deals more attractive to bidders. Certain parts of the Asian franchise of RBS such as its Pakistan unit would be more be more attractive to domestic bidders rather than an international bank.
RBS chief executive Stephen Hester is moving ahead quickly with plans to dispose of non-core businesses. Mr. Hester aims to trim 20 per cent from the bank’s £2 trillion (A$4.11 trillion) balance sheet to help turn the troubled lender around. A wide swath of the bank’s global banking and markets division is expected to be sold in the medium term as RBS retrenches.
The assets, which include operations in China, India, Taiwan, Indonesia and elsewhere, are a portion of the Asian assets acquired by RBS when it led a consortium to buy part of ABN Amro in 2007.
A spokesperson for RBS said the bank is “in active discussions with potential buyers” of its retail and commercial businesses in Asia Pacific, but declined to comment further.
Any deal would substantially increase the Australian bank’s presence in the region. However ANZ is expected to have to bid against larger rivals with much deeper pockets for the assets.
ANZ is most likely to be the preferred bidder for RBS’s India franchise, since the regulator, the Indian central bank would, in most likelihood not sanction a sale of an existing branch network (which RBS runs in India under the ABN brand) to another international bank, with branches in the country
If ANZ was successful in a bid, analysts expect it to launch a multibillion dollar rights issue to help pay for the deal. ANZ has been the only one of the Big Four Australian banks in recent months not to undertake a capital-raising through an institutional share placement as part of a balance-sheet strengthening exercise.
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[...] Money-AU reported yesterday that RBS was prepared to split the sale amongst various potential buyers, rather than sell the entire portfolio to a single buyer, largely for practical purposes. [...]