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    NWG   GB00B7T77214

NATWEST GROUP PLC

(NWG)
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Delayed Quote. Delayed London Stock Exchange - 10/15 11:35:09 am
233.9 GBX   +1.92%
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Saudi bank merger helps RBS to shed assets, boost capital

05/16/2018 | 08:04am EDT

LONDON (Reuters) - A merger of two Saudi banks, announced on Wednesday, will free Royal Bank of Scotland of 4.9 billion pounds in assets it has been trying to shed for years and boost its core capital, a source familiar with the matter said.

RBS has been trying to reduce its stake in Saudi Arabia's Alawwal Bank as part of efforts to shrink its balance sheet following its state bailout during the 2008 financial crisis.

The 18.6 billion riyal (3.7 billion pound) deal between Alawwal and larger rival Saudi British Bank (SABB) will reduce RBS's stake in the merged group to around 5 percent, compared to a stake of around 15 percent in Alawwal, the source said.

RBS should be able to reduce the capital it holds against the stake, hopefully later this year, the source said, freeing up enough funds to add around 40 basis points to RBS's tier one capital, a measure of a bank's financial strength.

Two other sources close to the merger also said it could be easier for RBS to find a buyer for the smaller stake it will hold after the deal.

The boards of SABB and Alawwal agreed to the takeover on Wednesday in Saudi Arabia's first major banking tie-up for around 20 years.

The source said it also marked a milestone for RBS, bringing the bank's decade-long effort to rid its balance sheet of trillions of dollars in unwanted assets closer to a conclusion.

RBS acquired a stake in Alawwal via its ill-fated takeover of Dutch bank ABN Amro in 2007, which played a big part in RBS's near-collapse and subsequent 45.5 billion pound rescue by the British taxpayer in 2008.

The bank bought ABN Amro as part of a consortium that included Banco Santander and Belgian bank Fortis.

RBS's interest in the consortium was around 38 percent, leaving it with a stake of around 15 percent in Alawwal, the source said.

This amounted to around 5.9 billion pounds in related risk-weighted assets on the bank's balance sheet, which can now be reduced to 1 billion pounds.

RBS remains more than 70 percent owned by the British government.

($1 = 0.7418 pounds)

(Reporting by Emma Rumney. Editing by Silvia Aloisi and Jane Merriman)


ę Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
BANCO SANTANDER, S.A. 1.97% 3.3455 Delayed Quote.31.82%
JUST GROUP PLC -0.65% 91.9 Delayed Quote.31.47%
NATWEST GROUP PLC 1.92% 233.9 Delayed Quote.39.52%
THE SAUDI BRITISH BANK 0.60% 33.7 End-of-day quote.36.33%
WILL GROUP, INC. 2.46% 1332 End-of-day quote.32.41%
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Analyst Recommendations on NATWEST GROUP PLC
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Financials
Sales 2021 10 751 M 14 781 M 14 781 M
Net income 2021 2 556 M 3 514 M 3 514 M
Net Debt 2021 - - -
P/E ratio 2021 10,6x
Yield 2021 4,00%
Capitalization 26 680 M 36 715 M 36 683 M
Capi. / Sales 2021 2,48x
Capi. / Sales 2022 2,42x
Nbr of Employees 59 822
Free-Float 44,0%
Chart NATWEST GROUP PLC
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NatWest Group plc Technical Analysis Chart | NWG | GB00B7T77214 | MarketScreener
Technical analysis trends NATWEST GROUP PLC
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 22
Last Close Price 233,90 GBX
Average target price 245,14 GBX
Spread / Average Target 4,81%
EPS Revisions
Managers and Directors
Alison Marie Rose-Slade Chief Executive Officer & Director
Katie Murray Chief Financial Officer & Executive Director
Howard John Davies Chairman
Simon Anthony McNamara Chief Administrative Officer
Robert Andrew Joseph Gillespie Independent Non-Executive Director
Sector and Competitors