RBS share price: Group starts winding down shipping business

on Sep 22, 2016
Updated: Mar 11, 2020

Royal Bank of Scotland Group (LON:RBS) has started winding down its global shipping finance business amid an ongoing industry downturn, Reuters has revealed. The news marks another setback for the bailed-out lender, whose sale of its Williams & Glyn business to Santander is reportedly under threat, with the Spanish bank having pulled out of the talks.

RBS’ share price has slipped into the red in London this morning, having shed 0.87 percent to stand at 181.60p as of 10:34 BST. The stock is underperforming the broader market, with the benchmark FTSE 100 index currently 0.98 percent better off at 6,901.73 points. The group’s shares have lost more than 41 percent of their value over the past year, and are down by just under 40 percent in the year-to-date.
Reuters reported this week that RBS had started winding down its global shipping finance business, ending efforts to sell it off during a worsening downturn across the freight industry.
“In line with the bank’s strategy to create a simpler, stronger, and more sustainable bank, better aligned to the needs of our customers in the UK and Western Europe, we are commencing the wind down of our shipping business,” a spokesperson for the bailed-out lender told the newswire. “We understand how difficult this will be for our staff and we will be offering support to those affected, including redeploying people in to other positions where we can.”
Reuters had previously quoted shipping industry sources as indicating that the FTSE 100 group, which has been trying to offload noncore assets, had been looking to sell its Greek shipping business, valued at around $3 billion, for over a year. A person close to the group, however, told the newswire that the bank had opted for an overall wind down as offers received for the Greek business did not match the value it wanted.
The development comes after news emerged this week that Spain’s Santander had pulled out of talks to buy RBS’ Williams & Glyn branches which the part government-owned lender is required to divest as a condition of its taxpayer-funded bailout during the financial crisis.
As of 10:53 BST, Thursday, 22 September, Royal Bank of Scotland Group share price is 202.40p.