RBS Brexit plan to move £13bn to Netherlands

Royal Bank of Scotland on Thursday updated its shareholders on the legal process for its plans to move up to £13 billion worth of business to the Netherlands if the UK leaves the European Union with no deal.

About 30% of the customers for its investment banking unit NatWest Markets would move to a new RBS Dutch subsidiary as well as existing transactions by March 4 in the event of a disorderly Brexit.

In a stock exchange statement, RBS said: “As previously announced, in anticipation of the UK’s departure from the European Union on 29 March 2019, The Royal Bank of Scotland Group plc … has been making its Dutch subsidiary, NatWest Markets N.V., operationally ready to serve NatWest Markets Plc customers who are incorporated or located in the European Economic Area …

“The RBS Group today announces that a petition was presented to the Court of Session in Scotland on 6 December 2018 for an order under Part VII of the Financial Services and Markets Act 2000 requesting approval of a Transfer Scheme for the replication of master trade documentation for non-UK European Economic Area customers and the transfer of certain existing transactions of EEA customers from NatWest Markets Plc to NatWest Markets N.V.

“The scheme is the approach we are taking to ensure optionality for continuity of service for non-UK EEA customers by having contracts (such as master agreements and other overarching terms of business) in place between non-UK EEA customers and NatWest Markets N.V.

“The scheme is designed with two phases to provide flexibility so we can be responsive to any political changes in relation to the UK leaving the European Union, such as any agreed transitional period …

The scheme impacts approximately 30% of NatWest Markets Plc’s customers, who account for approximately 20% of the NatWest Markets franchise revenues.

“In a scenario where there is an expectation of an immediate loss of access to the European Single Market up to circa £6bn equivalent of third party assets and up to circa £7bn equivalent of third party liabilities are expected to transfer from NatWest Markets Plc to NatWest Markets N.V.

“During a transition period, the move of non-UK EEA customers to NatWest Markets N.V. may be more gradual and subject to further political developments.

“Other transactions are expected to be transferred outside of the scheme to NatWest Markets N.V. during 2019 (for example certain transactions with Corporate and Sovereign customers and larger non-UK EEA customers from NatWest Markets Plc, and certain Western European corporate business from National Westminster Bank Plc).

“No debt securities issued by NatWest Markets Plc are included in the scheme or expected to transfer.”