RBS sells $5.6bn North American loan portfolio to Mizuho Bank
The Royal Bank of Scotland (RBS) will sell a $5.6bn (£3.7bn) portfolio of loan commitments to Mizuho Bank, it said today – its second deal with the Japanese lender in three months.
Around two-thirds of RBS' North American corporate loan portfolio has now been disposed of as the shrinking bank looks to exit many of its global operations and refocus on the UK.
In February it sold $3bn of North American loan commitments to Mizuho Bank, the retail and corporate banking arm of Japanese financial giant Mizuho Financial Group which is looking to expand lending outside of Japan where margins have been squeezed by low interest rates.
The transaction will cost Mizuho $500m, meaning RBS will generate a loss on disposal of around $30m. It is expected to be substantially complete by the end of the third quarter of 2015.
RBS has previously looked to Japanese banks to buy its non-core assets having sold RBS aviation capital to Sumitomo Mitsui Financial Group in 2009 for $7.3bn and a project finance portfolio in Europe, the Middle East and Africa to Mitsubishi UFJ Financial Group in 2010.
The state-backed bank sold 135m shares in its US bank Citizens Financial Group last month as part of its plans to extricate itself from the group by 2016. The share sale will raise RBS between $3.2bn (£2.1bn) and $3.7bn.
In a statement RBS said:
The original transaction announced on 26 February 2015 remains on track and is subject to progressive closing as customer and agent banks' consents are obtained. Together with the announced sale to Mizuho in late February, approximately two thirds of our North American corporate loan portfolio and associated commitments identified for exit have now been disposed of.