RBS to raise £3 billion through asset sale in 2010

Royal Bank of Scotland, which is majority held by the UK government, is aiming to raise about £3 billion through asset sale in the new year. RBS expects to close the sale of its retail and commercial banking business in India, China and Malaysia to HSBC before the year-end.

HSBC entered the bidding race for select Asian assets of RBS in October after talks between Standard Chartered Bank Plc and RBS broke down over differences on the valuation of assets. (See: HSBC set to acquire RBS's Indian operations: report)

RBS, based in Edinburgh, is selling businesses in up to 36 of the 54 countries where it operates, after posting the biggest loss in British corporate history last year, which ended up in the British government bail-out.

The UK-based Observer said yesterday that the UK bank is also negotiating to sell its asset-management business for as much as £100 million.

The paper said that RBS is also intending to sell its highest profile business, the Sempra metals division, a joint venture, which came into its fold, when RBS along with a consortium led by Spain's Santander acquired ABN Amro in 2007. (See: Royal Bank of Scotland- Fortis- Santander consortium acquires ABN Amro in world's biggest banking takeover )

RBS holds 51 per cent in the JV, while the US-based Sempra Energy holds the remaining 49 per cent. Sempra Energy is also looking to divest its entire stake in the JV.

The sale of Sempra metals division could raise as much as £2.5 billion for RBS and Sempra Energy, but RBS is forced to sell its stake in the JV as it was ordered by the European Union as part of the conditions for the bank receiving £54 billion bailout from the state.

Australia-based Macquarie International is vying with US bank JPMorgan and Deutsche Bank to acquire RBS stake in the Sempra JV.