RBS Sell ┬ú15bn of Property a Year
Analysts believe that RBS, the Royal Bank of Scotland, are set to sell ┬ú15bn of property assets a year.
The move comes following a discussion in which Rory Cullinan – head of RBS’ non-core division – warned that the bank has “high” commercial property impairments, particularly in Ireland. Commercial property reportedly makes up 24% of the firm’s ‘non-core’ division which is equivalent to around ┬ú62bn.
According to The Telegraph, property debt in the UK currently stands at ┬ú228bn ΓÇô and much of this is linked to RBS and Lloyds Banking Group among others. Some analysts believe that the banks’ approach to dealing with this debt is crucial for the future performance of UK property values.
Nathan Bostock, head of reconstruction and risk at RBS, said that the firm were currently making “good progress” and had reduced non-core funded assets by 25% over the last 15 months.
JP Morgan analyst Harm Meijer said that RBS is aiming for ┬ú15bn of property sales a year, split evenly across the UK and Europe. Property sales are expected to range from ┬ú3m to ┬ú100m.
As reported on our blog in May, the Global Banking and Markets division of RBS recently took office space at Spinningfields in central Manchester.