By Jason Theodorou
Royal Bank of Scotland has announced that it will sell a controlling stake in its credit card payment processing division to a private equity consortium, for an amount up to £1.9 billion. The bank is expected to make an £850 million profit from the sale of Global Merchant Services (GMS) business to a consortium comprised of Advent International and Bain Capital.
RBS will take a minority stake in the new group of 19.99%, and will promote the GMS product suite to customers. The bank said that Advent International and Bain Capital will make significant investments in technology and products. The sale will be completed in the fourth quarter of 2010, pending approval from the European Commission.
RBS was bailed out by the government at the height of the credit crisis, but has recovered to make a £9 million profit for the first six months of the year. In return for substancial governemnt support, RBS has been forced to sell off certain assets - recently selling 318 branches to Spanish bank Santander.
Bruce Van Saun, RBS finance director, said: "The sale of GMS is another significant milestone in the group's restructuring programme. GMS is an excellent business. The transaction will be good for both staff and customers as the business implements its ambitious expansion plans".
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