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Will RBS stay strong in Asia?

15 October 2008

As RBS receives a £20bn cash injection from the British government, Stephen Hester, its new chief executive, is planning to overhaul the firm’s strategy by shrinking its balance sheet and focusing primarily on core UK operations.

But if RBS is returning to its roots in British consumer and commercial banking, where does this leave its Asian operations?

The bank, which employs about 15,000 staff in Asia Pacific, has been expanding in the region, boosted by its takeover of ABN AMRO and its 5% share in Bank of China. Can this growth continue now that the UK government is set to take a massive stake in RBS?

Hester says RBS will continue to have a presence around the world. “I have every confidence that RBS will continue to be a very international bank, with very strong presences internationally.” (Financial Times)

Is Hester being too hopeful? Do you think the future of RBS in Asia is safe as the firm reviews its strategy? Will domestic bliss replace Asian expansion?

Comments (8)

RBS has to take advantage of this crisis and aggressively acquire customers especially those who are with US banks.

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Comments (8)

  • Yes, I am sure RBS will definitely stay strong in Asia, as the region is still very profitable.

    David Anush 15 Oct 2008

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  • RBS first needs to deal with repaying £5 billion worth of preference shares to the UK government at 12 % interest...there are consequences of taking state help.

    Mr Reedy 16 Oct 2008

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  • RBS has huge operations in Asia-Pac now - thanks to ABN - which it is integrating into its business. The takeover was only last year, so it will be hard to reserve such a recent policy.

    Damien 16 Oct 2008

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  • if RBS has any chance of breaking out of its government chains, it needs to be strong in regions where it has the best chance of making money: eg Asia!!

    Vivo 16 Oct 2008

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  • RBS is in trouble. It apparently has billions of unfunded retained bonuses of ABN employees to sort out too. Everyone there wants out, they are only staying for something that may no longer exist.

    integrate 16 Oct 2008

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  • RBS is in for a tough ride. Firstly, transactional banking for ABN AMRO ASIA is minimum compared to other more established foreign banks. It's market share for credit cards and unsecured lines are far behind its competitors. Mortgage loans is almost unheard of. They positioned themselves as a premier bank focusing solely on investment advisory. Enable to fulfil a retail customer's financial needs, it is very likely that the customer treats ABN as a secondary bank account. In addition, the lack of inhouse investment products have also diluted the exclusiveness of being a premier bank.  Network of branches and ATMs acquired from ABN are too few compared to the rest of the competitors.

    RBS has to take advantage of this crisis and aggressively acquire customers especially those who are with US banks. The customer service of such US banks sucks in ASIA markets. (i.e.The bank that never zzzz. - they have even remove OTC bill payments service for their own products from their branches, considering that there's hardly any crowd in the branches!) . By providing a superior service, and pricing its products competitively - I'm sure that asia markets will take to the new kid on the block.

    Alvin 16 Oct 2008

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  • If businesses in Asia are facing downturn, RBS would be affected as the clientele base become shaky. The strength of Asia would be reflected in year 2009 when the shrink from the American shrink of consumption. Asia is not standalone as no one is an island.

    Chua KB 17 Oct 2008

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  • well the good thing is RBS will stop loss leading in Asian FX & Rates which is great for the competition!

    Falcon 19 Oct 2008

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