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RBS confirms sale of stake in Bank of China
2009-01-15
LONDON - The Royal Bank of Scotland PLC said Wednesday it has sold its 1.6 billion pound ($2.3 billion) stake in the Bank of China, a move analysts say is meant to shore up its balance sheet. RBS said in a statement it sold its 4.3 percent stake -- about 10.8 billion shares -- at HK$1.71 per share, and that the sale came as a result of a strategic review. The impact of the sale on capital ratios is expected to be broadly neutral. The move comes weeks after the bank was taken over by the British government with a majority stake of almost 60 percent. Shares in the Edinburgh-based bank fell more than 9 percent to 41.7 pence on the news. "While the bank will be booking a profit on the deal, having paid 1 billion pounds for the stake in 2005, the sale may have been somewhat forced on RBS by circumstances," said Richard Hunter, an analyst at Hargreaves Lansdown Stockbrokers. Hunter said there were concerns RBS' full year results, due in late February, could show a loss, compared with the more than 10 billion pound operating profit they made in 2007.
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