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RBS to Shut Some Units in Korea, Indonesia and Singapore

RBS CEO Stephen Hester
Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester. Photographer: Munshi Ahmed/Bloomberg

Royal Bank of Scotland Group Plc, Britain’s biggest state-owned lender, will shut some operations in South Korea, Indonesia and Singapore after failing to find a buyer for the businesses.

The U.K. lender will today begin closing the cash equities, equity capital markets and corporate finance units in Korea, as well as the cash equities operations in Indonesia and Singapore, Yuk Min Hui, a spokeswoman for RBS in Hong Kong, said in an e-mailed response to queries. About 70 people will be affected.

RBS said in January it would cut about 3,500 jobs at the investment-banking unit and sell or close unprofitable divisions. The bank is in talks to sell some Asia-Pacific assets to Malaysia’s CIMB Group Holdings Bhd. It also sold the Hoare Govett U.K. corporate broking unit to Jefferies Group Inc., transferring about 50 jobs. The bank hasn’t found buyers for the rest of the U.K. equities business and last month eliminated as many as 300 posts.

“It was our goal to sell all of these APAC businesses together,” Hui said today. The Edinburgh-based lender has since determined that certain assets won’t be included in the sale to CIMB because of “commercial reasons,” she said, without elaborating.

RBS will continue to operate its debt financing, transaction services and risk-management businesses in Korea, Indonesia, Singapore and eight other Asia-Pacific countries, according to Hui.

Shares of RBS fell 1.9 percent to 28.61 pence by 9:40 a.m. in London, narrowing their rise this year to 42 percent.

Pan-Asian Ambitions

CIMB, based in Kuala Lumpur, and RBS signed a memorandum of understanding to negotiate the sale of the businesses in the region, the Malaysian lender said in a filing to the local stock exchange on March 1. CIMB Chief Executive Officer Nazir Razak, who is seeking to build a pan-Asian financial-services provider, said Feb. 27 that his bank is also in talks to acquire a stake in Manila-based Bank of Commerce.

Banks and brokerages in the Asia-Pacific region are joining global rivals that have cut more than 200,000 jobs since the beginning of 2011 as Europe’s debt crisis triggers a slowdown in the region.

The government owns 82 percent of RBS after injecting 45.5 billion pounds ($72 billion) of public money into the lender at the height of the financial crisis, making it the costliest bailout of any bank in the world.

RBS CEO Stephen Hester said last month that restructuring the bank was like defusing “the biggest time bomb in history.”

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