RBS seeking buyer for Greek shipping operation
(23 June 2016 – Greece) The Royal Bank of Scotland (RBS) has received bids for its Greek ship finance business, industry sources have revealed.
They told Reuters that the total business was worth around US$3 billion (A$3.98 billion) although shipping experts added that the valuation may be hampered by problems lending to shipping businesses, stemming from heightened downturn and market activity.
Credit Suisse and China Merchants were among the suitors bidding, reports said.
"RBS has held preliminary discussions with a number of interested parties," a source has said. "The big difference here is they are not selling a portfolio of loans but a business."
China Merchants, one of the country's biggest conglomerates, has been looking for cheap shipping and commodities-related assets in Europe, hoping to take advantage of the market downturn.
The move by a Chinese lender is likely to provide a path into Europe. Conversely, for the business to being acquired by Credit Suisse, the Edenborough-based bank “will have to offer something more as Credit Suisse is already a big player now in Greece," a ship finance source highlighted.
In the quarterly results announcement, RBS said its total shipping exposure reached £7.1 billion (A$13.96 billion) in Q1 2016, a decrease from £7.5 billion in December. Non-performing loans to the industry increased by nearly 100 percent to £827 million in the same time period.
Reports suggested that RBS was closing its Greek operation and placing its shipping loans portfolio up for sale first emerged in July last year.
"RBS has tried to put this sale together for some time. In the past two quarters, conditions in shipping have got worse and that has had some effect on the portfolio," a source told the news wire service.
Subscribe