RBS Unloads Bank of China Stake to Boost Balance Sheet
Byline: HUGO DUNCAN
ROYAL Bank of Scotland today put its entire stake in Bank of China up for sale for $2.3 billion ([pounds sterling]1.57 billion).
The bank that has been bailed out by the British Government offered investors the 10.8 billion shares it owns in Bank of China for HK$1.68 to HK$1.71 each a discount of up to 9% on this morning's closing price of HK$1.85.
Government was forced to step in and take a 58% stake in RBS for [pounds sterling]20 billion in October to help it recover from crippling writedowns and losses in the credit crunch and economic downturn.
Analysts in Hong Kong said it marked a "loss of face" for RBS but came as no surprise in the City as RBS moves to further strengthen its battered balance sheet under new chief executive Stephen Hester.
It also earned RBS a tidy profit. It bought the 4.3% stake for $1.6 billion in 2005, but will lose some of the gains through hedges and fees. The
Since taking over as chief executive from Sir Fred Goodwin in November, Hester has moved to refocus RBS towards UK lending rather than the international expansion seen under his ousted predecessor, the climax of which was the ill-fated ? …