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Royal Bank of Scotland redefines focus in China

By Wang Bo (China Daily)
Updated: 2009-08-10 08:19

Royal Bank of Scotland (RBS), which recently redefined its core offerings to the marketplace, now is positioned to focus on its investment banking business in China, a senior bank official said.

The goal is to become one of the nation's top five foreign wholesale banks, said John McCormick, RBS's chief executive for global banking and markets in the Asia-Pacific region.

Despite recently moving to offload its Asia-Pacific retail and commercial banking units, the bank will continue to have a strong presence in China, McCormick said.

RBS will provide a wide range of investment banking products to its corporate, financial and government clients, he said.

"China was defined as a core market by RBS's strategic review earlier this year," McCormick told China Business Weekly in a recent interview.

"Our ambition in China is to become one of the leading foreign wholesale banks to capture an important opportunity as China grows to become a major economic power," he said.

His remarks came as the bank moved to combine its Asian corporate and investment banking divisions in mid-July.

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The restructuring will bring under one roof its mergers and acquisitions advisory service equity capital markets, primary debt, corporate finance, and risk and debt origination services.

Hit hard by the ongoing global financial turmoil, RBS, which now is 70-percent owned by the UK government, earlier this year announced plans to sell off its retail and commercial divisions in Asia.

The sale of assets, which McCormick said is nearing the advanced stage of negotiations, is vital to shore up its financial standing.

Standard Chartered Bank and Australia and New Zealand Banking Group are considered the leading contenders for RBS's assets in China.

In an effort to restructure its global business portfolio, RBS reduced its presence from 54 countries to 40 countries. In the Asia-Pacific region, its presence shrank from 15 countries to 11.

The bank wants to cut back its operations in most of these countries except in North America and the United Kingdom and Republic of Ireland, with its remaining business focused on the wholesale and investment banking sector.

"As for China, in addition to our current offerings, we will try to develop and capture renminbi-related businesses," McCormick said.

"The yuan is becoming a more international and important currency with the gradual opening up of China's capital markets," he said.

Earlier this year, RBS was among a number of foreign financial institutions to sell its holdings in Chinese banks to help repair balance sheets strained by the financial crisis.

McCormick said his bank wants to build new business based on the "broad and deep" relationship with Bank of China established over the past three years.

"We want to achieve more joint business successes in the areas of global banking and markets," McCormick said.