Monday, November 15, 2010

RBS To Sell GBP 3.8 Bln Finance Assets To Bank Of Tokyo-Mitsubishi

(RTTNews) - U.K.- based lender Royal Bank of Scotland Group plc (RBS.L: News ,RBS: News ) said Monday that it has signed a non-binding Memorandum of Understanding or MoU with Japan's Bank of Tokyo-Mitsubishi UFJ, Ltd. for the proposed sale of a non-core Project Finance assets. The sale price is not revealed.
According to RBS, the portfolio to be acquired comprises loans worth about GBP 3.8 billion or US$6.1 billion in aggregate and mainly consists of natural resources, power and other infrastructure assets in the UK, Europe, the Middle East and Africa or EMEA, Asia Pacific or APAC and the Middle East. The transaction is said to mark the first major sale of oil and gas financing assets since the financial crisis.
RBS and the U.K. government, which owns 84% of the lender, were in talks with Mitsubishi UFJ and RBS has been asked by the government to sell off non-core operations to pay back public funds after receiving 45.5 billion pounds of government funding during the global financial crisis. The bank has one of the world's largest project financing operations, with strength in lending to railroad, energy and other infrastructure projects in Europe, the Middle East and Africa. The Bank of Tokyo-Mitsubishi UFJ, Ltd, or BTMU, a subsidiary of Mitsubishi UFJ Financial Group, Inc. (MTU: News ) also said today that it has reached agreement with RBS on key terms for the proposed acquisition.
BTMU noted that the proposed acquisition, including the transfer of certain employees, will significantly strengthen its project finance business in EMEA and will assist it in achieving its aim of becoming one of the leading project finance banks globally.
The proposed sale is subject to the signing of a legally binding sale and purchase agreement as well as subsequent receipt of required regulatory approvals. The banks are expected to sign the agreement by year end.

Separately, Mitsubishi UFJ Financial said today that its net income for the first half ended Sept. 30 more than doubled to 356.7 billion yen or about US$4.3 billion from 140.9 billion yen in the previous year. The Tokyo-based company also boosted its full-year profit target to 500 billion yen from 400 billion yen.
Earlier this month, Royal Bank Of Scotland had posted a narrower net loss for the third quarter, reflecting mainly lower impairment losses and improved performance in Retail & Commercial businesses. Looking ahead, the company said its fourth-quarter market environment remains challenging. RBS closed Friday's regular trading at $13.48 on the NYSE. RBS.L is currently trading at 41.75 pence, up 0.73 pence or 1.78%, on a volume of 14.18 million shares. MTU ended on Friday at $4.7 on the NYSE.


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