Is Royal Bank of Scotland about to sell off Coutts?

Probably the most famous person with a Coutts bank account is HM the Queen, and this Royal Bank of Scotland owned bank may soon be about to change hands as RBS have informed staff that they are looking into either offloading the International part of this bank or they may decide to sell it.

There are of course several options available to RBS is regards Coutts which they have reported they cannot get the expected 15% return on equity which they have not only set for Coutts but also all of their other many different divisions.

Whether setting that return on equity at such a high amount was ambitious remains to be seen, but one thing is for sure Coutts has not been performing anywhere as near as well as RBS had expected and with the bank continuously looking to maximum the returns from all of their many different divisions, if the Coutts Bank cannot be restructured then they may soon sell it off.

It is the International arm of Coutts that is causing RBS the most headaches and the news released yesterday will have been upsetting for the 1200+ staff employed by Coutts in various different countries including Qatar, Monaco and Switzerland.

The sale of the Coutts Bank’s International arm could raise up to £600 million for RBS, however many commentators are saying that in light of the current financial climate RBS may struggle to get £300million for it.

But with RBS struggling to find funds to set aside for the many ongoing lawsuits against them and the huge fines imposed by regulators any large input of cash would be welcome.

In fact Coutts has not been immune to the fines imposed on banking institutions recently, for back in 2012 they were hit with a huge fine of some £8.75million for its poor implementation of anti-money laundering controls, which for a bank of its rather modest size what a huge hit to take.

This news did of course have a knock on effect on the share price of RBS and it finished down 6p as 339.6p. Whether the sale of Coutts, if that is the option thy take will improve the share price of RBS does remain to be seen, and it will be interesting to see who, if anyone, steps forward and shows an interest in purchasing the International arm of Coutts.