HONG KONG: The head of Asia-Pacific of the Royal Bank of Scotland said the bank has engaged in talks to form a securities joint venture on the mainland, while the bank is also hiring new staff in its derivatives and trading groups.

Hit hard by the global financial crisis, RBS, which is 70-percent owned by the British government after last year's bailout, has been selling off its retail and commercial division in Asia to raise funds.

However, RBS's Asia-Pacific Chief Executive Officer John McCormick said the bank is back on track and now seeking a securities joint venture in China.

"We are actively seeking a partner. That's one of the top five initiatives for the investment banking side," McCormick told Reuters yesterday.

McCormick said the bank is hiring across different divisions and focusing on top corporate clients in the Asia-Pacific region, though it will continue selling the remaining retail and commercial units in Asia.

Global banking giant HSBC, which recently moved its chief executive to Hong Kong to inaugurate its shift of business focus to emerging Asia, might be in the lead to acquire the remaining Asia assets of RBS, McCormick said.

In August, Australia and New Zealand Banking Group agreed to buy RBS's retail, wealth and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong for around $550 million.

After selling off its Asia retail and commercial business, RBS's corporate clients in the region will be slashed to fewer than 1,000 from 10,000.

Despite the sale of assets in Asia, RBS said it will continue building a strong presence on the mainland, as it aims to become one of the top five foreign wholesale banks in the country.

McCormick said earlier that RBS will try to develop and capture renminbi-related business, as the yuan is becoming more international and important with the gradual opening up of capital markets on the mainland.

Like many foreign banks hit by the global financial turmoil, RBS in January sold off assets -- a 4.3 percent stake in Bank of China (BOC) to raise HK$18.48 billion, after it reported a net loss of 24.1 billion pounds, around HK$263 billion, last year.

BOC spokesperson said the strategic partnership with RBS ended after the stake sale, yet normal business relations between the two banks would remain.

McCormick said RBS's sale of the stake in BOC was regrettable, since he believes it would have been a great strategic partnership with the mainland lender.

(HK Edition 10/29/2009 page4)