RBS Said to Seek Sale of Australian, Asian Divisions

Feb. 20 (Bloomberg) -- Royal Bank of Scotland Group Plc, the biggest government-controlled U.K. bank, is considering plans to sell all or part of its Australian division along with other assets in Asia, three people familiar with the plan said.

The lender may approach Commonwealth Bank of Australia, which bought HBOS Plc’s BankWest unit in the country last year, one of the people said, declining to be identified as details are private. RBS has hired Morgan Stanley to help it sell some of its Asian operations, the people said. Morgan Stanley also advised RBS on the sale of its Bank of China Ltd. stake.

RBS aborted an earlier attempt to sell its ABN Amro investment banking and corporate finance units in Australia after Sydney-based Commonwealth Bank abandoned negotiations in August, citing turmoil in the financial markets. The ABN Amro Australia unit had been valued at as much as A$1 billion ($640 million), one of the people said.

Edinburgh-based RBS was crippled by then Chief Executive Officer Fred Goodwin’s 14.3 billion-euro ($18 billion) takeover of ABN Amro’s investment banking and Asian assets, announced in March 2007, three months before the credit crisis began. Goodwin was ousted in October after the government agreed to take control of the bank. The lender posted a record 28 billion-pound ($40 billion) loss for 2008.

RBS spokesman Neil Moorhouse and London-based Morgan Stanley spokesman Michael Wang both declined to comment. An official at Commonwealth Bank in Sydney didn’t immediately respond to a message left on his cell phone after business hours.

RBS expanded through about $140 billion of takeovers in the past decade, according to data compiled by Bloomberg. The bank also acquired Cleveland-based Charter One in 2004 and a 5 percent stake in Bank of China the following year. The bank sold its 7.6 percent stake in Beijing-based Bank of China last month for $2.3 billion, loosening RBS’s foothold in the world’s most populous nation.

The bank’s shares fell 11 percent to 19.3 pence in London trading today. The stock has dropped 61 percent this year, paring RBS’s market value to about 7.6 billion pounds.