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SCMP Reporter

The strategic partnership between Bank of China and Royal Bank of Scotland Group will terminate this month as the financial crisis takes its toll on the once-sweet relationship.
A source  said RBS  had  ended its private  and corporate banking businesses with BOC and would finish settlement on their co-operative programmes  at the middle of this month.
RBS cashed out of its 4.3 per cent stake in BOC in January to raise HK$18.48 billion  to help deal with its own financial problems.  The bank reported a net loss of GBP24.1 billion (HK$262.97 billion) for last year.
BOC spokesman Wang Zhaowen said the strategic  ties ended when RBS sold  the stake  but  'normal' business relations would remain. 
RBS  was still offering consulting services to BOC, but all  its employees  had left the BOC operations, the source said.
RBS bought the shares in 2005 before the mainland bank's initial public offering.  It once sent more than 1,000 professionals  to help BOC meet international accounting standards and enhance its risk control management.
As part of its efforts to exit Asia, RBS said  it planned to sell the retail and commercial banking businesses of newly acquired ABN Amro China.
The bank will keep the operations of RBS' Shanghai and Beijing branches, as well as  ABN Amro China units, because the bank considers  the mainland  a core market.  
China Construction Bank Corp also faces  a share sell-off risk. Bank of America Corp, a 16.6 per cent stake holder, said on Tuesday it had no plans to sell its Construction Bank  shares in the near future.  But there is a possibility  of selling part of it when necessary.
Investments in mainland banks  would regain popularity  when the turbulence waned,  Celent analyst Zhang Hua said.
'While bigger Chinese banks feel less in need of help from foreign investors, relatively weaker city commercial banks and Postal Savings Bank of China are very interested in introducing foreign partners,' Mr Zhang said.  'Co-operation with these banks could also help foreign investors channel into the promising  market.'
Meanwhile, Hongkong and Shanghai Banking Corp chairman Vincent Cheng Hoi-chuen said yesterday  the bank would not  cut its stakes in Bank of Communications and Ping An Insurance (Group).
HSBC  has a 19.01 per cent stake in Bocom and  16.8 per cent of Ping An.
Mr Cheng (left) also said the bank would continue to expand its business on the mainland by hiring more people and opening more outlets. 
The bank has 81 outlets  and about 5,300 employees there.
He also said the bank would invest in securities firms on the mainland if opportunities arose.
Additional reporting by Maria Chan



Royal Bank of Scotland links to Bank of China nearly at an end