The chairman of bailed-out British bank Royal Bank of Scotland expressed regret at the lender's decision to sell its 4.3 per cent stake in Bank of China, and said Beijing was 'right to be disappointed' at the move. The British high street lender's chairman, Philip Hampton, said of the BOC stake sale: 'I think they [the Beijing government] were disappointed. And they were right to be disappointed. It was supposed to be a long-term deal.' RBS bought its Bank of China stake in 2005, in a deal that its previous chief executive, Fred Goodwin, predicted would allow the lender to sell its own banking products to mainland consumers through its partner's vast branch network. It sold the stake for ?1.7 billion (HK$22.52 billion) last February, after receiving the biggest bailout in banking history from the British government. At the time, analysts widely predicted RBS had offended Beijing and would be prevented from making more inroads into the mainland's lucrative banking market. That fear was partly scotched yesterday when Hampton said that RBS won central government approval to launch a securities joint venture with a relatively small, provincial Chinese stockbroker. RBS has partnered with Guolian Securities, which is based in Wuxi, a city northeast of Shanghai in Jiangsu province. The deal will allow RBS to advise mainland companies on Shanghai initial public offerings, and to help them issue bonds. Other foreign banks, including Goldman Sachs, UBS, Deutsche Bank and Credit Suisse, have struck similar deals with Beijing-based partners. But Lawrence Lam, RBS' head of Greater China, claimed it was not a problem that the British lender's partner was based in Wuxi. 'There are still only a handful of foreign banks who have these securities joint ventures in China,' Lam said. Guolian ranks 38th on the Securities Association of China's list of members. Ian Gordon, an analyst who follows RBS at Exane BNP Paribas in London, said RBS' joint venture with Guolian was: 'In the context of the RBS group as a whole, not significant to the investment case, though it could provide an incremental positive [for earnings] much further down the road.' Gordon said it was probably regrettable, in hindsight, that RBS sold out of Bank of China. But, he added: 'I imagine they were under an awful lot of pressure to do this.' RBS has been suffering financially since it led a consortium to acquire Dutch lender ABN Amro for Euro72 billion (HK$777.33 billion) in August 2007, just before the credit crunch bit, in what proved to be an incredibly overpriced deal. The bank is now 83 per cent owned by the British government. It reported a ?1.15 billion net loss for the three months to September. RBS was not the only Western bank to offload shares in Chinese lenders as the credit crunch bit. In December 2008, UBS also sold a 1.5 per cent stake in Bank of China, while Bank of America sold part of its holding in China Construction Bank.