SIR Fred Goodwin was last night facing rising investor concern over his stalled programme of asset sales after talks about the mooted £400 million sale of ABN Amro's Australian and New Zealand business collapsed.
National Australia Bank announced it had quit negotiations to buy the wholesale and investment banking operations that Royal Bank of Scotland acquired as part of the takeover of ABN last year by an RBS-led consortium. The setback came just over a wee
k after NAB, owner of Clydesdale Bank in Scotland, announced it was in the talks.
Ending the talks will be seen as an embarrassment for Goodwin, the RBS chief executive, who has made asset disposals a key part of his strategy to recapitalise the Edinburgh-based bank.
It comes just weeks after Zurich Financial said it was walking away from the multi-billion-pound auction of RBS's insurance arm, which includes Direct Line and Churchill. Both Italian insurer Assicurazioni Generali and Warren Buffet's Berkshire Hathaway had already withdrawn from the bidding for the insurance division in May.
RBS's shares were down 6 per cent at one stage yesterday before closing down 2 per cent at 199p.
It is understood RBS is still talking about a potential sale of the insurance arm to other players, including American and German insurance giants Allstate and Allianz respectively, and possibly China's Ping An insurance.
It is also believed that RBS has other potential suitors interested in buying ABN's antipodean assets. They are said to include Commonwealth Bank of Australia and Nomura of Japan.
NAB gave no reason for pulling out of the sale talks yesterday, although it is understood that price was again the sticking point. Analysts had put a value on ABN Amro Australia Holdings of roughly A$800m (£390m), based on estimated 2008 profits of A$105m.
Simon Willis, banking analyst at London broker NCB, said: "It does not help sentiment for RBS that these talks have failed.
"But in the wider scheme of things, the Australian deal was always going to be relatively small. The pivotal transaction remains the mooted sale of the Royal's insurance division, but things have gone very quiet there as well."
RBS shares are now more than 30 per cent lower than when the bank concluded its £12 billion rights issue to repair its balance sheet in June. Analysts have said this is partly because Goodwin is seen as trying to sell assets off in a bear market.
Earlier this year RBS also raised £3.6bn from the sale of train-leasing firm Angel Trains.
Some analysts said yesterday that the list of buyers breaking off talks with Goodwin about the sale of the various assets showed he was not prepared to be bounced into knockdown prices.
"He's said all along he will only sell at the right price, and it makes you wonder whether the insurance arm sale, in particular, will eventually be pulled altogether," one RBS-watcher said.
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