RBS’s McCormick Expects Growth in India, China, Australia

John McCormick, Royal Bank of Scotland Group Plc’s Asia-Pacific chairman, expects growth from the region to continue with Japan lagging behind India, China and Australia. He commented in an interview with Bloomberg television today at the World Economic Forum in the northeastern Chinese city of Dalian.

On where RBS expects to see growth in Asia:

“We see the growth in India, we see the growth in China and interestingly we see continued growth in a very sophisticated, demanding market in Australia where we’ve got a very strong position.

‘‘We see Japan continuing to be somewhat of a laggard. ‘‘Southeast Asia will continue to provide us with opportunities from time to time as increasingly Asian champions from all over the Asia-Pacific go on the hunt for opportunities.’’

On Growth Through Acquisitions:

‘‘We have no intention of any in-organic growth at all. We’re three years into a five year strategic plan. We’re absolutely delivering on that plan.’’

On the bank’s stock price:

‘‘The industry share prices right across the globe have come down and the banks are under a lot of pressure.

‘‘The work we have to do is stay very focused on our clients and delivering day-in and day-out. That will generate the earnings to get the dividends going on the shares again. ‘‘That will allow many more investors to come into our stock and that’s what’s going to drive the share price up.’’

On inflation:

‘‘Food-price inflation is a big headache in India, certain parts of China and certain parts of southeast Asia. If you talk about energy prices, many economies in Asia for example still subsidize the end user, and that hasn’t fed through to inflation.’’

On whether China’s exchange rate:

‘‘They’re using Hong Kong as an incubator center with which they’re trying all of this internationalization of the RNB. They’re using Singapore also as a center. They also have swap and liquidity arrangements with Korea.

‘‘Convertibility in terms of the capital account will be something they do in their own good time. They will create swap arrangements through the People’s Bank of China through each of the central banks in the United Kingdom, in Singapore, Hong Kong and Korea and probably other centers going forward.

‘‘They will do it on a staggered basis. It’s the control of that lever -- getting the liquidity money from offshore back to onshore -- is the key as to when they open up the capital account for the real movement of goods and services, particularly financial products.

‘‘Time will tell when that will occur.’’

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