Royal Bank of Scotland sells Bank of China stake
The Royal Bank of Scotland has today announced an agreement to sell its stake in Bank of China for in excess of $2.3 billion. The move to sell the bank's 4.3% stake appeared to be moving into play last week when new chief executive Stephen Hester visited the region. However, there are serious concerns that the bank is selling the family silver to get by in the short term.
The $2.3 billion the company will receive after the sale of the Bank of China stake goes through could well be increased if the company is able to offload its insurance division for around £7 billion. This would bring monies raised to in excess of £8 billion which would likely be used to increase the company's capital adequacy and asset base. This has prompted a number of analysts to suggest that maybe the situation in the UK banking sector is worse than first thought, with the rush to raise money continuing.
When the economy recovers and the UK financial sector starts to pick up again, there are concerns that the Royal Bank of Scotland will have sold off its most profitable investments and operations leaving it with a mixed bag of operations. A business which took years and decades to build has quite literally been taken apart in just a few short months.
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