Royal Bank of Scotland Group Plc, Britain’s biggest government-owned bank, is to sell its Pakistan unit and its United Arab Emirates retail banking assets as part of its strategy to offload overseas divisions.
RBS agreed to sell its Pakistan division for 41 million euros ($50.5 million) to Faysal Bank Ltd., giving the acquirer a 99.37 percent stake in RBS Pakistan Ltd., according to a statement today. The bank also said it plans to sell its UAE retail unit to Abu Dhabi Commercial Bank PJSC for about 68 million pounds ($101 million.)
The sales mean the bank has sold three international assets this week, after agreeing to dispose of its Argentine unit to Banco Comafi SA for an undisclosed sum on June 14. RBS Chief Executive Officer Stephen Hester is shedding assets after his predecessor, Fred Goodwin, left the bank with a presence in more than 54 countries following more than $100 billion of acquisitions.
RBS is withdrawing from 16 countries and scaling back in a further 21 after posting the biggest loss in British corporate history in 2008. In addition, the bank will remain in 17 “core countries,” according to Michael Strachan, an Edinburgh-based spokesman at RBS.
The sale of RBS’s Pakistan unit is “a cheap deal and a very good opportunity for Faysal Bank,” said Khurrum Schehzad, head of research at Invest Capital & Securities Ltd. in Karachi.
This was RBS’s second attempt to sell the unit after MCB Bank Ltd., Pakistan’s biggest lender by market value, canceled a proposed takeover following a dispute over depositing shares as security. MCB had agreed in August to acquire 99.4 percent of RBS Pakistan for about $87 million.
The purchase would add 79 branches to Faysal’s network of 133 outlets, according to First Capital Equities Ltd. in Karachi. The transaction is expected to be completed in the third quarter of this year, Faysal Bank said in the statement to the stock exchange today.
“It’s a perfect fit considering we were trying to increase our footprint,” said Naved A. Khan, chief executive officer of Faysal Bank.
Shares of RBS Pakistan rose 9.3 percent to 11.73 rupees in Karachi, while Faysal, majority owned by Ithmaar Bank BSC of Bahrain, rose 6.9 percent to 15.35 rupees.