Wednesday, Royal Bank of Scotland Group plc (RBS, RBS.L) said it has disposed of its 4.26% equity stake in Bank of China for a net consideration of GBP 1.6 billion. RBS sold 10.8 billion H shares at HK $1.71 per share.
The bank said the decision to sell the stake was part of the ongoing strategic review of its businesses announced in October. After taking account of tax and the effects of currency hedging, the impact of this disposal on the company's capital ratios is expected to be broadly neutral.
Further, the company said it will no longer record the equity minority interests relating to its original consortium investment in Bank of China in its accounts from January 2009. The loss of these equity minority interests reduces the company's capital ratios by approximately 15 to 20 basis points. As a result of the above actions, the company will benefit from an overall reduction in RWAs of around GBP 4 billion.
RBS said it will continue to operate its network of branches across China in the areas of Global Banking & Markets, Global Transaction Services, Wealth Management, and Retail & Commercial Banking.
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