Japanese bank to buy £3.8bn RBS portfolio
Royal Bank of Scotland today agreed to sell a massive portfolio of project finance loans to Japan's Mitsubishi UFJ Financial Group as part of its campaign to cut the size of its balance sheet.
The £3.8 billion portfolio of assets includes financing for infrastructure projects in the UK, Europe, Asia and the Middle East and power, oil and gas projects across the world.
The sale is part of RBS's chief executive Stephen Hester's plans to sell off non-core assets. After RBS was bailed out by the state and became 84% owned by the taxpayer Hester identified £258 billion of non-core assets. By the end of September this had come down to £154 billion.
Among the sell-offs has been the sale of 318 branches to Santander for £1.6 billion, RBS's share of commodities trader Sempra for $2 billion (£1.2 billion) and a 1.4 billion (£1.2 billion) loan portfolio to Intermediate Capital.
RBS recently hired investment banks Morgan Stanley and Goldman Sachs to advise it on the sale of its insurance business which includes Churchill and Direct Line. A sale could be a worth around £4 billion.
The bank has to offload the insurance business by the end of 2013 as part of the orders laid down by the European Union for it receiving state aid. Hester had been reported to favour a stock market flotation for the insurance arm but is now prepared to look at an outright sale.
Today's deal is expected to be completed by the end of the year.
