RBS considers sale of Coutts’ foreign arm to focus on U.K.

IN A MEMO to employees on Monday, Royal Bank of Scotland Group PLC said it is considering a sale of its Coutts International private bank. The international unit accounts for 41 percent of Coutts' customer assets and 35 percent of revenue, according to the memo. / BLOOMBERG FILE PHOTO/MATTHEW LLOYD
IN A MEMO to employees on Monday, Royal Bank of Scotland Group PLC said it is considering a sale of its Coutts International private bank. The international unit accounts for 41 percent of Coutts' customer assets and 35 percent of revenue, according to the memo. / BLOOMBERG FILE PHOTO/MATTHEW LLOYD

LONDON – Royal Bank of Scotland Group PLC is considering selling the international arm of its Coutts private bank as it shifts its focus to wealthy clients in the U.K.

Britain’s largest state-owned lender is also examining options including joint ventures or merging Coutts International, it said in a memo to employees on Monday. An internal review of RBS high-net-worth operations recommended to “substantially increase” efforts to expand the U.K. business, which counts Queen Elizabeth II among its customers.

CEO Ross McEwan, 57, is cutting back investment-banking operations and focusing on domestic customers after the company received the biggest bank bailout in the world. RBS, which is still 80 percent owned by the government, is also scheduled to sell its Citizens U.S. consumer bank in an initial public offering later this year.

The international unit of Coutts accounts for 41 percent of customer assets and 35 percent of revenue, according to the memo. The unit may be put up for sale as narrowing margins and its small size make it “challenging” to meet RBS’s target of at least a 15 percent return on equity, a measure of profitability, in all businesses.

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Alison Rose, CEO of commercial and private banking, will lead a team overseeing the revamp, “to ensure we make quick and meaningful progress,” according to the memo. RBS will keep its Coutts and Adam & Co. brands in Britain.

Linda Harper, a spokeswoman for RBS in Edinburgh, confirmed the contents of the memo.

The shares fell 1.4 percent to 340.90 pence at 1:40 p.m. in London. They have risen 0.8 percent this year, while the FTSE All-Share Banks Index decreased about 9.1 percent.

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