RBS to Soon Announce Sale of Coutts International

By Max Colchester and John Letzing 

LONDON-- Royal Bank of Scotland Group PLC will soon announce the sale of the international arm of its wealth business Coutts to Swiss bank Union Bancaire Privée, according to people familiar with the matter.

In recent months RBS, which is 80% owned by the U.K. government, has been in protracted negotiations over the sale of Coutts International. UBP saw off interest from Credit Suisse Group AG and a consortium of Société Générale SA and DBS Bank Ltd, according to people familiar with the matter. Analysts have speculated that the unit could be sold for around $600 million.

Geneva-based UBP has reported having 98.7 billion Swiss francs (about $102.7 billion) in assets under management as of the end of last year, a 12.5% increase compared with 2013. The bank has pursued a strategy in recent years of expanding through acquisitions, agreeing in 2011 to buy Dutch lender ABN AMRO Group NV's Swiss bank and reaching a deal in 2013 to acquire U.K.-based Lloyds Banking Group's international-private banking business.

RBS said last August that it would focus on U.K. high-net-worth customers and cut the international-wealth unit. RBS said Coutts International would struggle to hit a profitability target of 15% return on equity as it lacked scale. The unit employs around 1,200 staff across seven countries, including offices in Zurich, Abu Dhabi and Singapore. As of December it had GBP14.5 billion of assets under management.

Similar to other banks with a presence in Switzerland, Coutts's Swiss business is currently participating in a U.S. Justice Department self-reporting program designed to unearth untaxed American assets, which may result in fines for banks but could also provide guarantees they won't be prosecuted in the U.S. RBS said it expects to reach a related resolution with the U.S. Justice Department this year. UBP has already said previously that it is participating in the self-reporting program.

Write to Max Colchester at [e-mail] and John Letzing at [e-mail]

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