RBS set to alight from £3bn shipping loan book

According to reports from Sky News, the still 73 percent state-owned, bailed-out lender is working with bankers at Lazard to examine options for the shipping loans, which could be run off, sold or hived off in chunks to potential buyers.

The bulk of the business under review relates to RBS’s shipping finance business in Greece.

Edinburgh-based RBS has already exited dozens of countries and is continuing to take steps to shrink its vast balance sheet, which now stands at roughly £700bn.

Chief executive Ross McEwan is pressing on with the task of exiting the sprawling legacy of its expansion under Fred Goodwin, who was ousted with RBS on the brink of collapse.

RBS’s shipping business accounted for just over £8.2bn of its total assets at the end of the third quarter last year, representing not much more than 1 per cent of its overall balance sheet.

Sky News said that bank insiders had said that the portfolio being worked on by Lazard was less than half of that total shipping exposure.

Last autumn, RBS warned of tough conditions in the shipping market, echoed on Wednesday by AP Moller-Maersk, the industry giant, which said the environment was worse than during the 2008 financial crisis because of the slowdown in global trade.

“Conditions remained depressed in the bulk market during 2015 as a result of vessel oversupply and a slowdown in commodity demand from China,” RBS said in October.

“Tanker market conditions are currently favourable and container markets over the last 12 months have stabilised but remain weak in comparison to historic averages… downside risks exist over the next 12-18 months.”

An RBS spokesman said: “RBS Shipping is a strong franchise with one of the most significant portfolios in European finance.

“In light of our wider strategy to create a simpler, stronger, and more sustainable bank, better aligned to the needs of our customers in the UK and Western Europe, we are actively exploring alternative strategic options for our Shipping business.”