RBS eyes Australian assets sale

RBS is keen to sell non-core assets to beef up its balance sheet

Royal Bank of Scotland (RBS) is looking to sell the Australian and New Zealand operations of ABN Amro - the Dutch bank it bought last year.

National Australia Bank said it was in talks to buy ABN's investment and corporate banking units from RBS.

Last year RBS led a consortium to buy ABN Amro in a deal worth 71bn euros ($112bn; £56.7bn).

Since then, global credit problems and a tougher economic environment have forced RBS to strengthen its finances.

Price struggle

Last month, the Edinburgh-based company raised £12bn after selling shares to existing shareholders in a rights issue - the biggest in UK corporate history.

It has also sold off the UK's biggest train leasing firm, Angel Trains, for £3.6bn to a consortium and is keen to offload its insurance assets, which include Direct Line and Churchill. But with firms intent on preserving capital and cheap debt difficult to come by, it may struggle to get the price it wants, analysts say.

Zurich Financial Services, one of the leading bidders, pulled out of the race for these businesses on Thursday.

National Australia Bank said that there was "no certainty" that a deal would be reached.

"Any potential transaction would be subject to due diligence and, ultimately, the receipt of relevant regulatory approvals," the Melbourne-based firm said.

If a deal is agreed, National Australia would be returning to share dealing for the first time since the 1990s when it closed a stock broking unit.

ABN Amro's Australian and New Zealand operations employ about 750 staff.