RBS negotiations with Standard Chartered over Asian assets are not over yet

image According to sources familiar with the matter, Royal Bank of Scotland`s talks to sell some of its Asian assets to Standard Chartered remain "in full swing."

Asia-focused Standard Chartered has said it is in talks about small acquisitions in China and India, likely to cost up to $200 million. The talks involve the retail and small business operations that state-controlled RBS hopes to sell as part of a turnaround plan, the sources said. There were some obstacles in the complex negotiations, particularly over valuation, said another source familiar with the matter, but it was too soon to say whether they would derail the process.

The Financial Times had reported on Tuesday that the sale of RBS’s retail and commercial assets in China hit a critical obstacle, with chances of a deal with StanChart falling to "around three out of 10". StanChart was disappointed to discover that far more RBS customers than it had envisaged were locked in to specific products, limiting any acquirer’s ability to move them, the paper said.

RBS said on Tuesday it was in ongoing discussions with bidders for the remaining assets it had decided to sell in Asia and would make announcements in due course. RBS is selling the Asian assets as it pulls back to core markets after it was bailed out by the UK government. Industry sources have long said the sales could prove complex, with possible corporate customer defections, slowing growth in Asia and unpredictable regulation among the key risks.

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