RBS in MUFJ project deal

ROYAL Bank of Scotland (RBS) is in talks to sell a $6.4bn (£4bn) project finance book to Japan’s Mitsubishi UFJ Financial, which includes loans for London’s orbital M25 motorway and a gas pipeline between Russia and Germany.

Sources told City AM the sale would help the government--backed bank boost its balance sheet.
RBS, led by chief executive Stephen Hester, has been shedding non-core assets over the past year including the sale of 300 branches to Santander over the summer.

The portfolio is believed to include a loan RBS extended last year for the widening of London’s M25 orbital motorway and financing for a pipeline that will ship 55bn cubic metres of Russian gas to Germany and the European Union in 2011 and 2012.

The bank does not plan to exit project finance if a deal goes ahead and plans to retain its UK origination staff, though lending has been slimmed down.

Both RBS and Mitsubishi UFJ declined to comment.