RBS shares gain on asset sales hopes

Royal Bank of Scotland shares are rising in morning deals amid growing hopes the group will sell a number of its businesses and some of its branches over coming months.

Shares added 1.35p, or 3.26%, to 42.8p after an FT report said two bidders had emerged for one of the group’s investment banking businesses.

Shares have fallen 24% since the beginning of May – far more than the 9% fall on the market since then – on concerns about how much cash banks will need to keep in reserve and how high taxes will be on banks alongside growing concerns about the global economy.

Yesterday, reports suggested the group had whittled down bidders for its payment processing arm and three suitors are still left in the race.

Together, those businesses are expected to raise around £5 billion, helping to bolster the group's balance sheet.

Earlier this week, there were reports that National Australia Bank had decided against bidding for some of the bank's branches but Santander is still in the running.

Bruce Packard, analyst at Seymour Pierce, though said there is still a lot of uncertainty about the prospects for the group.

'We like the management but feel it is too early in the restructuring process for equity investors to be confident about the final outcome,' he said.

He says the next potential catalyst is the G20 meeting in Toronto at the end of June where global leaders are expected to unveil their latest views on new banking regulation.

Banks have been lobbying aggressively ahead of the meeting, claiming new rules that demand they store more cash will threaten the global recovery.