“Royal Bank of Scotland Group Plc Chief Executive Officer Stephen Hester is being pressed by the U.K. government to sell more assets and bolster capital as the Treasury tries to recoup some of its 45.5 billion-pound ($68.9 billion) investment in the bailed-out lender.
RBS (RBS) will this week announce plans to sell a stake in Citizens Financial Group Inc. and shrink assets at its investment-bank by as much as 30 billion pounds, said a person with knowledge of the plans, who asked not to be identified because the matter is private. As recently as August, Hester said he didn’t intend to sell the U.S. consumer and commercial lender it acquired in 1988.
“RBS is clearly under pressure from the government to shrink and make the bank much simpler,” said Ian Gordon, an analyst at Investec Plc (INVP) in London, who values Citizens at about 8 billion pounds and has a sell rating on the stock. “Regulators seem to be saying that RBS needs to raise capital.”
Hester, 52, has cut assets by more than 800 billion pounds, eliminated 36,000 jobs and scaled back RBS’s securities unit since he took over from Fred Goodwin in 2008. The shares are still little more than half the price the government paid for its 81 percent stake when it rescued RBS during the financial crisis, the biggest bank bailout ever.