Royal Bank of Scotland is closing its equity capital market and corporate finance units in South Korea and cash equities businesses in Indonesia, Korea and Singapore in the latest move to cut the size of its struggling investment bank.
The decision sheds light on the British lender's recent agreement with CIMB Group Holdings Bhd for the sale of Asian assets, signalling that Malaysia's second-biggest bank is eyeing RBS's Hong Kong, India and Australian businesses to boost its investment banking presence in Asia.
CIMB has in recent years significantly boosted its presence in Southeast Asia through banking and brokerage assets acquisitions in Indonesia, Singapore and Thailand.
CIMB said earlier this month that it had entered into exclusive talks with RBS to acquire some of its Asia-Pacific cash equities and investment banking businesses.
"The main idea behind the acquisition is for CIMB to secure a presence beyond ASEAN," said Chris Eng, head of research at Malaysian broker OSK. "The main markets that will benefit them from RBS are places they don't have, such as Hong Kong, Australia and Northeast Asia."
An RBS spokeswoman said 70 employees would be impacted by the closure of the units and that it would work closely with CIMB to conclude the deal for the other Asian units.
"For commercial reasons, we have agreed with CIMB that the cash equities, ECM and corporate finance businesses in Korea and cash equities in Indonesia and Singapore will not ultimately transfer as part of the sale," RBS said. "We have therefore made the decision to initiate steps to wind down these businesses commencing today."
City A.M. Reporter