ROYAL Bank of Scotland's Asian business is attracting attention from the Australia and New Zealand Banking Group.
It is understood the fourth-largest Australian bank is preparing to bid £2bn to buy the assets, which would include RBS's Hong Kong and mainland businesses.
Australia and New Zealand Banking Group is believed to have hired Credit Suisse to advise
on the RBS deal. Sources have also said that Standard Chartered might be interested in buying some of RBS's operations.
The speculation emerged in the wake of RBS last week reporting losses of £24bn for 2008, the biggest annual loss in British corporate history.
In its plans to return to profit, RBS has said it aims to scale back its operations in Asia, where its presence greatly expanded after it bought ABN Amro. RBS's former chairman Sir Tom McKillop has acknowledged that its 2007 decision to buy Dutch bank ABN Amro, which was heavily exposed to the sub-prime crisis, was a "bad mistake".
In January RBS sold about $2.4bn (£1.7bn) of shares in Bank of China, signalling a scaling back in the region.
Stephen Hester, RBS chief executive, is planning to reduce the bank's international interests to refocus on the UK. Last week he said RBS would make "sweeping" changes to its structure.
Meanwhile, Lloyds Banking Group, which last Friday reported losses of £10bn, is hoping to reach agreement with the Government early this week on its asset protection scheme (APS), an attempt by the Treasury to clean up bank balance sheets by identifying and insuring risky assets. This will remove uncertainty about the value of past loans. It is another attempt by Chancellor Alistair Darling to restore confidence in the UK banking sector.
Analysts said Lloyds is intending to put £250bn of risky assets into the scheme to allow it to focus on building up its lending business.
Sandy Chen from Panmure Gordon said Lloyds will want to plough all of its commercial and other property exposures into the scheme.
While the APS could end up costing Lloyds more than it is costing RBS, he said "it would still be worthwhile to participate".
RBS has put £325bn of toxic assets into the scheme and has paid £6.5bn for the insurance it offers.
Lloyds chairman Sir Victor Blank said the delay in reaching agreement was partly down to Treasury officials being exhausted following their long discussions with RBS.
So far, only RBS and Lloyds have applied to join the scheme, but sources say Barclays may follow their lead.
The full article contains 428 words and appears in Scotland On Sunday newspaper.
