Less than a month after it was announced that RBS would be withdrawing from the Japanese market, the UK-based lender is in talks this week over retreating from the continent altogether. As part of a major restructuring strategy launched in 2014, the bank has made public its plans to exit various international markets in recent months, including central and eastern Europe and the Middle East. The lender is also taking bids for its non-UK operations of its private banking arm, Coutts, and is in the process of divesting Citizens, its US retail banking operation, which listed on the stock exchange last year.
[RBS] is now facing pressure to simplify its business and focus on its domestic operations
Ross McEwan, Chief Executive, is aiming to reduce the bank’s overseas operations to less than a quarter of its assets, and it has been speculated that it will ultimately withdraw from over half of the 38 countries it currently trades in. Since his appointment in October 2013, McEwan’s cost-cutting initiatives have gradually returned the bank to profitability following an £8.2bn loss in 2013, and he aims to eventually return it to private ownership. 80 percent of RBS is owned by the British government after it was bailed out post-financial crisis, and it is now facing pressure to simplify its business and focus on its domestic operations.
While the move has been anticipated for some time now and if confirmed will not come as a surprise to many, a retreat would put an end to a 185-year presence in Asia, where it employs around 2,000 people across China, Hong Kong, India, Indonesia, Malaysia, Thailand and Taiwan. According to Bloomberg, it is likely to retain some corporate banking operations in Singapore, where its Asian headquarters are based. In recent years many global banks, including UBS and Barclays, have scaled back dealings on the continent after struggling to compete with local players on costs.