RBS is a mess, and it’s unloading assets left and right in an effort to stabilize the government-owned bank, according to a Wall Street Journal article today.
The bank, which is 82 percent owned by the British government, has pledged to get rid of the bulk of the remnants from a troubled history of acquisitions and ill-fated expansions by the end of 2013. However, the bank will be left with a pile of bad assets that it plans to burn off over several more years. The bank says selling its most-unpalatable assets at a steep discount would eat into its capital base.
RBS already sold U.S. personal loans, small business loans in Britain and Irish real estate investments – mostly to U.S. and Japanese banks and hedge funds. Now it hopes to do away with a luxury London hotel, a Romanian bank, a pub run by British film director Guy Ritchie and a fleet of jumbo jets – among the remaining 175 deals deemed less desirable.
This appears to be a trend, according to the paper, as BNP Paribas and HSBC are also struggling with the losses of shedding assets.
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