Sale 'poorly handled' by RBS

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The Independent Online
THE SALE of Charterhouse by Royal Bank of Scotland to Credit Commercial de France and Berliner Handels und Frankfurter Bank was yesterday criticised by analysts as 'poorly handled' but hailed by Charterhouse's chairman and chief executive, Victor Blank, as 'the first real financial services link-up between London, Paris and Frankfurt'.

Richard Coleman, analyst at James Capel, said yesterday that the sale was 'poorly handled all along'.

He pointed out that the price of pounds 235m includes a pounds 50m special dividend taken out last September by RBS.

At this price RBS has only managed to sell Charterhouse for its approximate net worth, Mr Coleman said, if the value of the hidden reserves is as rumoured at pounds 50m.

Mr Blank, however, hailed the sale. 'Two major Continental European institutions have decided to invest in the London market,' he said. 'This must be a good sign for the City.'

Mr Blank expects that opportunities will arise to plug into the merger and acquisitions deal-flows of his new Continental partners.

Charterhouse already has pounds 600m of its own and institutional money to invest as development capital.

'Institutions in the Far East that want to invest in a European upturn can do so through us,' Mr Blank said.

'Charterhouse can now offer its clients a European-wide corporate finance and stockbroking service.'

Another analyst, Nick Collier of Morgan Stanley, said that the price was 'as expected' and reflected the conflict of interest between the managements of Charterhouse and RBS.

'Charterhouse saw the business developing in a different way from RBS,' he said.

Ian Robertson, managing director of the corporate and institutional banking division or RBS, admitted that the sale price was 'fairly close' to Charterhouse's net worth.

He pointed out, however, that the retained capital markets operation made more than pounds 5m profit last year and that the Scottish development capital business 'should make reasonable profits over a two-year time-frame'.

Mr Robertson said the sale arose from the need for Charterhouse to be part of a pan-European network at a time when RBS was concentrating on its core business of retail banking and insurance.

It was 'hard to see how the two could be reconciled,' he said. He said RBS would continue to use Charterhouse on an arm's length basis.

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