Dutch Lender Rabobank Said to Consider Sale of U.S. Retail BankMatthew Monks
Rabobank Groep, the Dutch lender selling assets to boost capital, is exploring a sale of its U.S. retail bank or other American operations, people with knowledge of the matter said.
The bank, based in Utrecht, Netherlands, is interviewing potential advisers to run a sale process and determine how much it could fetch for Rabobank N.A., a 120-branch agriculture lender in California, said the people, who asked not to be identified because the matter is private.
Rabobank hasn’t hired an adviser or decided what, if anything, to divest in the U.S., where it wants to maintain a presence, said the people. It is considering selling the retail bank and using proceeds to capitalize Rabo AgriFinance Inc., its U.S. specialty finance business, one person said.
Hendrik Jan Eijpe, a spokesman for Rabobank in Utrecht, said the bank has no plans to sell the U.S. unit. He wouldn’t comment on whether Rabobank is meeting with potential advisers.
Rabobank would join Royal Bank of Scotland Group Plc in selling U.S. assets. The Edinburgh-based bank is open to takeover offers for its U.S. subsidiary as it prepares the division for an initial public offering this year, the unit’s chief executive officer said last month.
Separately, OneWest Bank FSB, the lender backed by John Paulson and George Soros, is working with Goldman Sachs Group Inc. to find a buyer as it also prepares for an IPO, people with knowledge of the matter have said.
Rabobank N.A. had $1.3 billion in tangible book value at Sept. 30, according to the Federal Deposit Insurance Corp. Tangible book value represents how much a bank is theoretically worth in liquidation.
The Dutch parent has been whittling down internationally as it seeks to boost its core Tier 1 ratio, a key level of financial strength, to 14 percent by 2016 from 12.9 percent at June 30. Rabobank, fined 774 million euros ($1.05 billion) last year for rigging interest rates, agreed in December to sell its Polish bank to BNP Paribas SA, and closed the sale in July of its asset-management arm Robeco to Orix Corp.
A cooperative founded in the 19th century to serve Dutch farmers, Rabobank built its California bank through a series of acquisitions in the 2000s. The U.S. lender had $13.8 billion in assets at the end of September, according to the FDIC. It earned $42 million in the first nine months of 2013, down 25 percent from a year earlier, according to FDIC data.
Rabobank’s U.S. operations include Rabo Securities USA Inc., a broker-dealer, according to regulatory filings. They all operate as part of Utrecht-America Holdings Inc., which at the end of December had more than $52 billion in assets, making it the 39th-largest bank holding company in the U.S., according to the Federal Reserve.