M&A

3 November, 2009

FACTBOX-Asset sales by RBS, Lloyds

LONDON, Nov 3 (Reuters) - Royal Bank of Scotland (RBS.L) and Lloyds Banking Group (LLOY.L) will be partially broken up to satisfy Europe's competition watchdog, to compensate for taking state help. [ID:nL3540088]

RBS faces much bigger disposals, although it has four years to sell or spin-off the businesses affected.

Britain's Treasury said the divestments together represent almost 10 percent of the UK retail banking market.

The following are details of the disposals announced by the banks: (sources: RBS, Lloyds, Treasury)

RBS:

--To sell within the next four years parts of its UK branch and corporate business; RBS Insurance; Global Merchant Services; and its interest in RBS Sempra Commodities.

--The businesses contributed 1.1 billion pounds ($1.8 billion) of operating profit in 2008 and 5.7 billion pounds of revenue.

--Divestments will be timed to maximise value, possibly through initial public offerings, sales or a combination of these.

--UK branch sales: Includes sale of RBS branch network in England and Wales -- originally named Williams & Glyn's -- and the NatWest branches in Scotland and Direct SME customers across Britain.

It includes 318 branches (14 percent of RBS's UK retail network), 1.7 million retail customers, 230,000 SME customers, about 6,000 staff and 20 billion pounds of assets. It represents 2 percentage points share of the UK retail market, 5 percentage points of the SME market, and 5 percentage points of the mid-corporate market.

--RBS Insurance: RBS is UK market leader in motor insurance, including Direct Line, Churchill and Green Flag brands. RBS also sells general insurance, mainly motor, in Germany and Italy. It said unit is seen as a potential IPO in the future.

--Global Merchant Services: A card payment acquiring business, which has a top 5 global market share. It enables clients to accept card payments either at point of sale or over the Internet, enabling over 5 billion card transactions each year.

--RBS Sempra Commodities interest: Global commodities trader RBS Sempra is the fifth largest energy trading company in North America and offers trading, market-making and risk management in metals and other commodities.

LLOYDS: --Disposal of a retail banking business with at least 600 branches, a 4.6 percent current account market share and about 19 percent of the bank's mortgage balances.

--Lloyds will sell the TSB brand; the branches, savings accounts and branch-based mortgages of Cheltenham & Gloucester; the branches and customers of Lloyds TSB Scotland; additional Lloyds TSB branches and customers in England and Wales; and Intelligent Finance.

--Lloyds estimated the businesses to be divested contributed about 500 million pounds of pretax profit in 2008, after expenses of 600 million pounds and impairment charges of 300 million pounds. It generated income of about 1.4 billion pounds.

The businesses comprised 70 billion pounds of customer lending and 30 billion pounds of deposits and about 18 billion pounds of risk-weighted assets. ($1=.6115 pounds) (Compiled by Steve Slater; Editing by Greg Mahlich)

Source: http://www.reuters.com