RBS Moves To Acquire Stake In Suzhou

by Stewart Douglas

Story link: RBS Moves To Acquire Stake In Suzhou

The Royal Bank of Scotland has today been revealed as being in talks with a Chinese group, according to reports from state media in China today, which would see it look to acquire a 19.9% stake through its investment banking division.

The bank is thought to be in talks to acquire a stake in Suzhou Trust, at an advanced stage to see the negotiation of more detailed terms as it moves towards acquisition, in a move that would significantly strengthen the bank’s Asian presence and help it establish more of a foothold within the Chinese market.

According to the state-controlled 21st Century Business Herald, “…the two parties have got initial results in negotiations over key issues such as the selling price and the size of the stake,” which would suggest that the deal may be growing nearer to completion.

RBS has already purchased equity in the Bank of China, which would subsequently make the Suzhou equity acquisition the firm’s second within the growing Chinese market, which has been presented as a hot investment prospect for several years now to banks and investment firms around the world.

The 19.9% stake acquisition is designed to give the Royal Bank a substantial impact into the company, with a degree of control in the way in which the business is run.  However as a result of Chinese regulations preventing heavy foreign investment in domestic businesses, the stake has been limited to just under the thresh hold 20% maximum.

Should the move come to fruition, it would end a busy year for the Royal Bank of Scotland having already acquired Dutch bank ABN Amro in a consortium bid amongst other strategic investments across the globe after announcing relatively minimal sub-prime losses over the summer months.