Royal Bank of Scotland have confirmed the sale of its £1.6billion stake in the Bank of China.
Majority state owned Royal Bank of Scotland Group plc (RBS) has announced that it has sold its stake in The Bank of China.
The RBS, which also owns the National Westminster, ABN AMRO and a string of other companies around the world, announced the disposal of its 4.26% equity stake in Bank of China this morning as part of his ongoing strategic review.
Former Investment banker Simon Hester, who took the reins of RBS as Chief Executive on the 1st September 2008 announced the decision to sell the stake for £1.6 billion.
This news comes just two weeks after press reports suggested that RBS will retain Direct Line and Churchill Insurance which has been earmarked for sale since April last year. The insurance arm of RBS, which includes the aforementioned brand names, is thought to be worth around £7 billion.
RBS, however, have not formally confirmed that it has abandoned the sale of their insurance operations.
Despite selling the stake, which RBS has held since purchasing the stock for £900 million in August 2005, the group confirmed that it will continue to do business in China. It will continue to operate through its network of branches specialising in Global Banking & Markets, Wealth Management, and Retail & Commercial Banking.
RBS AMRO operate in twenty outlets throughout China and employs 1,400 people serving customers in Shanghai, Beijing, Shenzhen, Chengdu and Chongqing.
Despite hopes that the sale of RBS's equity stake in the Bank of China would help stabilise the Group’s share price which has, since Hester’s appointment in September been yo-yoing between 40p and 80p a share. The markets reacted badly to the news and RBS shares are currently changing hands at 46p, valuing the company at just £7.4bn billion.
This morning the company's shares are reacting badly to the news that RBS had sold its stake in the Bank of China and are currently changing hands at 48p a share valuing the company at just £7.7bn billion.
