U.K. policy makers are planning to appoint Rothschild to advise on a proposal to split Royal Bank of Scotland Group Plc (RBS), Britain’s biggest government-owned lender, according to the Financial Times.
Rothschild’s role could be announced as soon as this week, the newspaper reported yesterday, citing people close to the situation whom it didn’t identify. Rothschild is expected to begin the review immediately and hopes to complete it by September, according to the FT.
The U.K. should consider breaking up Edinburgh-based RBS, 81 percent owned by the government, and hiving off its toxic assets into a “bad bank,” the Parliamentary Commission on Banking Standards said in a report published June 19. Chancellor of the Exchequer George Osborne has said he opposes a breakup, partly because a full nationalization costing billions of pounds of public money would be required.
The Treasury is expected to choose an asset-valuation specialist, possibly BlackRock Inc. (BLK) or Pacific Investment Management Co., to review RBS’s loan book, the FT reported, citing bankers it didn’t identify.
Mark Semer, a spokesman for Rothschild at Kekst & Co., declined to comment. Phone messages left after office hours for a Rothschild executive in New York and an RBS executive in Stamford, Connecticut, weren’t immediately returned.
RBS was bailed out during the global financial crisis in 2008 and 2009 in a 45.5 billion-pound ($69.2 billion) rescue, the costliest ever for the banking industry.
The timetable for privatizing RBS was thrown into question when Chief Executive Officer Stephen Hester, 52, said he planned to quit before year-end at the request of the board. No successor has been named.
RBS, which has begun to cut 2,000 investment-banking jobs, will have completed most of its restructuring next year, allowing the government to start reducing its stake by the end of 2014, Chairman Philip Hampton said in May.
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