RBS bids to reassure investors
By Mark Kleinman and Philip Aldrick
Last Updated: 11:25pm GMT 02/02/2008
Royal Bank of Scotland would consider offloading assets including part of its minority stake in Bank of China in the event that a deepening crisis in the banking system requires it to raise fresh capital, The Sunday Telegraph has learned.
Sir Tom McKillop, RBS's non-executive chairman, is understood to have met RBS's top 20 institutional shareholders during the past fortnight and reassured them that the bank's board has no need or intention to cut its dividend or announce a capital-raising when it unveils full-year results later this month.
However, RBS has drawn up contingency plans in the event of a "systemic shock" to the British banking system. It would be prepared to reduce its stake in Bank of China, which it acquired in 2005 for £900m and which has since roughly trebled in value.
advertisement
McKillop's meetings with shareholders follow increasingly fevered speculation in the City that Britain's second-biggest banking group is on the verge of seeking fresh capital in the form of a rights issue or of slashing its dividend payout. RBS's share price has tumbled 12 per cent already this year on fears that its low tier one ratio - the key measure of a bank's strength - has left it vulnerable to a downturn.
Sources close to RBS insisted this weekend, however, that such concerns were overblown. "Nothing has changed since [a trading update in] December," said one.
RBS and its consortium partners, Spain's Santander and Fortis of Belgium, last year bought Dutch rival ABN for £47bn in the biggest banking takeover in history, a move that was overwhelmingly backed by RBS shareholders.
People close to the bank also insisted last night that RBS had no need to offload assets at fire-sale prices. It is in the middle of auctioning Angel Trains, a train-leasing business, and is thought to be prepared to pull the sale rather than dispose of it for significantly less than the estimated £4bn asking price.
Some institutional shareholders said they would support a rights issue ahead of any injection of cash by a foreign investor or a government-backed fund.
RBS's shares, like many in the sector, have been hammered by the credit crunch. RBS declined to comment.
tinyurl.com |
