Royal Bank of Scotland

RBS moves to rebuild ECM business

PUBLISHED : Saturday, 09 July, 2011, 12:00am
UPDATED : Saturday, 09 July, 2011, 12:00am


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The Royal Bank of Scotland (RBS) Group is currently engaged in two robust programmes to recover from what has been a challenging 12-month period for the Edinburgh-headquartered group in Asia.

Firstly, it is expanding its mainland operations.

Secondly, it is rebuilding its Asian equity capital markets (ECM) unit after the workforce at its corporate and investment banking operations in the region was almost decimated last year.

As growth consolidates in the Asia Pacific, RBS is targeting revenue growth of 15 per cent to 20 per cent this year at its global banking business in the region, unit head Matthew Kirkby says, adding that revenue on the mainland might rise at double that pace.

The workforce at Kirkby's division fell by about 20 per cent last year. Kirkby says he hired more than 40 investment bankers in Asia Pacific this year as RBS aims to get more work helping companies sell stock and bonds, and offer them additional services.

'We had too many people with the wrong skill sets,' Kirkby says. 'So we've prioritised two things - the two big ones for me in 2011 are getting China right and rebuilding our ECM business.'

John McCormick, Asia-Pacific chairman for RBS, says: 'Asia Pacific is a growth market for RBS Group and essential to the bank's strategy globally. We are seeing great opportunities in Asia. And our geographical footprint gives us an invaluable competitive advantage, particularly in onshore local market capabilities.

'Success in Asia is absolutely pivotal to the success of RBS Group and we will continue to invest strategically in this region.'

Four out of the bank's six global trading hubs are in the Asia Pacific region - Hong Kong, Singapore, Tokyo and Sydney.

'The RBS Asian franchise is predominantly driven by our wholesale and investment banking, transaction services and private banking businesses,' McCormick says. 'We will continue to capitalise on market opportunities.'

Most of the hiring this year has been conducted in Singapore and Hong Kong, closely followed by recruitment in Australia and mainland China.

So far this year, the bank has hired 40-50 in the equities business in Asia, in addition to some 50 investment bankers. RBS is now looking to hire a number of senior investment banking positions on the mainland to support its ambitious growth plans in this market.

Last month, RBS commenced its joint venture with Goulian Securities, the bank's first securities joint venture to launch this year in Asia, and one that shows considerable promise.